57% of advised assets are for clients who are approaching, at or in retirement. Advisers have a positive outlook seeing many factors expected to drive increased demand.

• Tax changes are the biggest driver with a net 63% seeing these increasing the demand for retirement advice
• The current market and economic environment is also a big driver of demand according to a net 54% of firms
• Even changes to the advice/guidance boundary are seen as positive by more than a third of advisers

Not all retirement advice is for those taking income, passing wealth on is equally important. On average, 46% of clients are taking regular income.

• 37% of advisers say most of their clients are looking to take income while preserving capital while only 14% said most clients were looking to exhaust their capital on or before death.
• 35% say passing savings on to loved ones is a priority for most of their clients
• Taking ad hoc lump sums is also popular with 19% saying most of their clients are doing this.

Firms are starting to act on the findings of the FCA’s thematic review, but some are still to get the message.

• 14% of firms have adopted a Centralised Retirement Proposition (CRP) in the past 12 months with 20% expecting to do so in the next year. Nearly half of these say regulation is driving this.
• The FCA criticised withdrawal approaches that didn’t reflect client circumstances but 27% regularly use a fixed safe withdrawal rate and 21% say they’ll do this more frequently in the future
• 24% have no current plans to adopt a specific risk questionnaire for retirement clients

Advised clients told us that working with an adviser generally improves their confidence and most are satisfied with the service they receive.

• 86% of clients say that taking advice increases their confidence of achieving their retirement goals (and none said it made them less confident)
• Half of clients scored the comprehensibility of advice as 9 or 10 out of 10. Only 11% felt they weren’t getting value from their adviser
• 92% of clients said they were on track for a retirement that was in line with or better than they expected before seeking advice

Using total return portfolios and selling shares is the most popular approach to generating income but other approaches are gaining ground.

• 51% of advisers say they always or often adopt the total return approach
• 34% always or often use income generating portfolios, up from 25% in 2022
• Usage of the income-led and “bucket” approach are expected to increase over the next few years with a net 7% of firms saying they expect to use these more frequently

While the recent Budget wasn’t as radical as some had predicted it will still have a big impact on retirement advice.

• 72% say that they currently leave drawing on the pension until last to limit inheritance tax and 61% told us a change to the inheritance tax treatment of pensions would affect all or most of their clients
• The Capital Gains Tax change will also impact with 44% saying it will affect all or most of their clients

Improved interest rates and concerns about market volatility have reignited client and adviser interest in annuities.

• 37% of advisers always or often recommend lifetime annuities with 26% always or often recommending fixed-term products
• Annuity use is on the up with a net 29% expecting to increase lifetime annuity use and nearly a quarter saying they’ll use fixed term products more
• The main use of annuities is where clients have limited appetite for risk but 35% are using fixed-term annuities to manage sequence of returns risk