Behaviour: the client landscape - uncertainty, anxiety and change

The average retiree may look much as they did before – the same age, needs and financial ambitions – but their resources and confidence levels are changing. As they move from a time where the government and employers provided for their retirement, many find themselves ill-equipped to take control of their own retirement outcomes. This has changed what advisers need to do in their jobs.

While many of today’s retirees can still rely on defined benefit schemes, buoyant personal pensions and well-fed ISAs, there are clear signs that the resources retirees have at their disposal are shifting. The latest research from BNY Investments and NextWealth, “Retirement Advice in the UK:Turning Insight into Outcomes”, shows that in the UK more variable sources of income are replacing secure ones.

While final salary schemes still support retirement planning for 69% of advised clients, that figured has dropped 4% in just a year and is likely to drop further. Other ‘traditional’ sources of retirement income are also weakening – personal pensions have dropped from 72% to 60%, ISAs from 71% to 55%, while property and buy-to-let options are also falling. The only area to rise is the workplace pension, which has risen from 56% to 65%. This paints a picture of advised clients with fewer resources available to them beyond their workplace pension scheme, at a time when those workplace schemes are increasingly DC rather than DB. This is a clear shift in responsibility back to the individual.

The survey shows many people are ill-prepared for this level of responsibility, with knowledge levels still relatively low. Advisers find that they are increasingly called upon to provide coaching and insight alongside day-to-day planning. One former adviser, now a financial communication & behaviour specialist said: “[Clients] don't really have a clue what is going on unless they read up on it, and if they do read up on it then they start saying, ‘I really don't understand what this means to me. I need someone to explain it.’” Another chartered financial planner agrees: “I still find it incredible the things I take for granted that other people don’t know when it comes to bread-and-butter planning.”

Clients may be getting the information they have from an eclectic range of sources. 41% of clients say financial news is a significant source of influence on their retirement decisions. However, this is not always reliable. The recent speculation around the November budget was particularly damaging. Many clients scrambled to preserve pension savings, feeling they were about to be struck by tax rises – many of which did not emerge or were poorly understood.

The speculation led to some poor decision-making. People took money out of their pension at the wrong time, with dire tax consequences. Withdrawals were made against advice without sufficient consideration of sequencing risk or long-term sustainability. One financial planner said he saw, “people cashing in pots over a quarter of a million and therefore paying tax at the highest rate.” For some, their pension planning will be permanently impaired.

Constant flux

Advisers increasingly have to contend with the problem of ‘noise’ – policy changes, media speculation, increasingly complex tax rules. Many advisers describe the challenge of helping people make decisions in the absence of clear, settled rules. Every budget brings the same round of kite-flying and speculation, making long-term planning difficult.

In some cases, clients have been right to be worried. There has been a steady drip of tax rises across successive budgets and successive governments, affecting clients in both the accumulation and decumulation phases.

The government’s recent budget continued this trend. A financial planner says: “The disparity between DB and DC continues to get wider with salary sacrifice on. You have got to get more money in than is probably currently going in and you have probably got to invest it more aggressively than you think you do. People are not doing that.”

One independent financial adviser says the freezing of thresholds has been difficult to navigate for their clients. “I have got some clients who have built up large pension pots, and they are in their mid-70s or older. Logically now it does not make sense to keep them in there, but if they are already higher rate taxpayers, it is quite an expensive route to consider 40% on withdrawal. And then what do you do with it? You can leave it, pass away and then potentially pay 40% inheritance tax plus marginal rate? It is not a nice conversation to have.”

What can advisers do?

Efforts to push for more certainty on tax and pension rules have fallen flat. Governments do not want to give away an important lever in tax and spending policy. Advisers need to accept the situation as it is, and not as they would wish it to be. That means accepting that they have a coaching role to their clients and embracing trusted resources to help clients understand their money better.

Advisers have employed techniques to help clients frame their decision-making and curb their worst instincts. One financial planner defined it as “giving clients what they want, then what they need.” They said: “We did not feel we knew our clients well enough, so we changed the fact find to have a huge emphasis on soft facts. We want all our reports to play back to the client at the very beginning, ‘this is what we're doing for you, this is what you want to achieve, this is what we're helping you with’.”

Advisers often describe having to move clients on from what they think they need – advice about their pension – to what they really need – financial planning. Advisers increasingly recognise the importance of co-created plans, positioning advice as a shared endeavour rather than imposing a plan from outside. Giving clients agency can help manage through periods of difficulty.

This collaborative approach acknowledges uncertainty, explains trade-offs and can evolve as client or market circumstances change. Clients need peace of mind at a time when the government nor their employer provide security. This reassurance may be as important a part of the planning process as maximising financial outcomes. 
 

Source: Research conducted by NextWealth for BNY Investments, based on responses to surveys with 207 retirement-focused financial advisers and 260 consumers of financial advice conducted in November 2025