Nearly three quarters (71 per cent) of pension advisers say their clients are concerned about running out of money in retirement, research by NextWealth, sponsored by Aegon, has revealed.

NextWealth’s Managing Lifetime Wealth report noted that recent high inflation, increased cost of living and economic volatility had put financial security as the primary concern for retirees, overshadowing aspirations for leisure and lifestyle changes.

Almost two thirds (64 per cent) of advisers said that their clients were worried about inflation and increased cost of living, while nearly half (49 per cent) cited concerns about covering long-term care costs.

These concerns were underscored by the recently updated Pensions and Lifetime Savings Association’s (PLSA) Retirement Living Standards, the report said, which showed a significant increase in the amount needed for a moderate retirement over the past year.

Although concerns about long-term financial security were evident, advisers found that clients’ expectations for retirement “remained grounded”.

More than three quarters (76 per cent) of advisers reported that their clients hoped to maintain the same standard of living in retirement as during their working life, while 65 per cent said their clients wanted to help the next generation with financial commitments and 45 per cent found clients wished to travel or live overseas.

“While the prospect of living longer brings many benefits, this research shows there are many challenges that come with navigating and making the most of your retirement years,” commented Aegon pensions director, Steven Cameron.

“71 per cent of advisers say that clients are concerned about running out of money before they die, which raises real issues about the adequacy of current savings behaviours, as well as highlighting the value of advice at and through retirement, including if drawing a flexible income.

“Worries about high inflation and the cost-of-living crisis also feature high on the list, with advisers finding that 64 per cent of retirement clients raise concerns due to the current economic climate.

“It’s not surprising that worries over the cost of long-term care features as a top three concern for retirement clients. These findings highlight how important it is for government to provide more certainty over social care funding, so advisers can help their clients to plan ahead.

“While concerns linger, the report also paints a picture of aspirations for retirement. These findings reinforce the research we’ve conducted on how living longer has impacted the retirement landscape.

“Those approaching or in their ‘Second 50’ are bearing more of their own financial risks. This means that personalised financial planning based on an understanding of clients’ hopes and fears is crucial for tailoring strategies that meet individual needs and provide peace of mind.”

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