Proportion of advised clients phasing into retirement halves in pandemic

The number of advised clients who are gradually phasing into retirement has halved as a result of the coronavirus pandemic, according to findings from Aegon.

Research showed that 74% of advised clients phased into retirement in 2019, but this fell to 38% in 2020.

Aegon’s recent Adviser Attitudes Report, based on the views of 250 financial advisers, suggested that the trend is likely down to several “push and pull factors”, with many people reassessing their priorities and some opting to retire following a loss of work.

This comes as recent data from the Office for National Statistics revealed that unemployment among over-50s has risen to 3.7% from 2.8% since the start of the pandemic.

Aegon pensions director, Steven Cameron, commented: “While the marked reversal of the previous post-pensions freedoms trend towards phasing gradually into retirement has taken everyone by surprise, it seems likely that – once the effects of the pandemic subside – people will revert to a more gradual transition into retirement.

“Accessing pensions flexibly can provide the financial means to move to reduced working hours while retaining the many benefits of still having some involvement in the workplace. Advisers can help clients navigate the complexities and benefit in the most tax-efficient way.

“Whatever else, these findings clearly demonstrate the immediate impact of the pandemic on clients’ financial plans and the important role of advisers in helping people, particularly those approaching retirement, reassess their circumstances in times of financial uncertainty.”

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