This is according to a new survey conducted by The Economist Intelligence Unit and sponsored by Swiss Life.
Currently about one in five citizens in Switzerland, France, Germany and Austria are aged over 65. By 2030 this will have risen to roughly one in four. The figures for several other European countries, including the UK, show a similar trend.
The survey confirms that much of Europe is ill prepared to address the challenges of ageing populations, indicating that significant majorities of people reaching retirement age are unlikely to seek to continue their professional lives.
This presents significant challenges and opportunities for financial advisers whose clients have reached, or are approaching, retirement age.
It also suggests that longevity concerns should be at the heart of most client-adviser conversations, even many years ahead of the client’s planned retirement age.
A longer self-determined life
The report, called “The longer self-determined life”, identifies that individuals across Europe place an extremely high value on living independent, self-directed lives when they are older. This desire for independence and control will shape client objectives and attitudes within the financial planning process.
When considering the issues of autonomy and longevity, there was a substantial consensus among the survey respondents about the main requirements for this independence, focused on physical health, mental health and having adequate economic resources.
“The mix of longer life expectancy and a range of additional factors, such as uncertain portfolio returns, effects of inflation, future tax rates, and sustainability of state-funded social security and healthcare, makes providing planning advice an increasingly complex task” said Loïc Le Foll, chief market officer, Swiss Life Private Clients Global.
“Affluent and high net worth clients alike want assurance that they can generate and access enough income in retirement to continue their current standard of living for as long as they live. This is a key element in delivering clients’ fundamental objective of living an independent life as it gives them choices in many areas of their lives such as where to live and which healthcare provider to use when they require medical treatment.”
“In addition to planning for an independent, self-determined life, many clients are also have clear objectives for passing wealth onto their loved ones in the event of their death, and financial advisers can help them achieve these objectives without compromising their quality of life in their retirement.”