In September 2019, I was on holiday when I received an urgent telephone call. My mother was seriously ill in hospital and I needed to return to the UK as soon as possible. I managed to get on the next day’s flight home, but I arrived too late.
The friends I was on holiday with looked after my wife while I sorted some urgent matters before returning to our holiday for the last couple of days. I promised everyone we would return to the same place this year to enjoy the holiday that had been interrupted.
Soon after our return last year, a holiday home and flights were booked. Little did we know what we were all going to experience throughout 2020. Suffice to say each member of our group has had experiences that were not good. The holiday this September could not come round quick enough.
Uncertainty remained. Would the country we were travelling to accept UK tourists? Would we have to quarantine on return? Even if quarantine was acceptable, would the airlines still be operating the flights we had booked long before lockdown?
By mid-summer we were optimistic, barriers were disappearing, and everything looked as if it would go to plan. Then the numbers of new Coronavirus cases began to rise in both the UK and the country we were travelling to. The original doubts began to re-emerge. It was close, several parts of the country we were travelling to were added to quarantine list and several airlines suspended flights to those areas. We were all watching daily announcements.
Apart from one flight that was rescheduled, all of us got there. A relaxing holiday was had which did everyone a power of good. Batteries were recharged to face the challenges of the next few months much stronger than if we had not got there.
To my mind there seem to be many parallels with our holiday travails and the journey from work into retirement. Especially in these uncertain times. Like our holiday, many things can seem out of control for the individual concerned which can affect the best laid plans.
In that regard, how many are now able to make a statement such as, ‘I am 60 years old and I’m going to retire on my 66th birthday.’
Even in ‘normal’ times, health issues and employment security during the final years before a planned retirement can mean the best laid plans are not realised. Health issues include those suffered by partners and close relatives as well as the person planning to retire. How many of those over the age of 60 give up work to care for a partner or elderly relative?
If someone planning to retire on their 66th birthday finds their job disappearing at age 63 what does that do to their plans? That is three years of savings which will not materialise. More importantly, three years of additional income that must be provided for from retirement savings without any State pension being received. I have not even touched on the investment expectations that may not be fulfilled.
We are already seeing large increases in the number of over-50’s losing their jobs. Recent history shows that many will find it difficult to return to work.
Our holiday group were lucky. We had a holiday that many will not have. Our journey and plans were fulfilled.
Many retirement plans will be fulfilled possibly with a little tweaking. An increasing number of plans will not be met for a variety of reasons.
What can be done to help those who are affected? For them, professional financial advice and guidance is important. Again, recent history shows that many will not seek it due to a change in circumstances. They will wait until the resulting financial problems have occurred.
Over the coming years, we will see an increasing number of people needing to turn to the later life lending sector, having retired with mortgages that have not been fully paid off, their retirement income being insufficient for their needs, or a combination of both. Advice will be crucial to ensure they are able to make the journey to, and into, retirement – this is a customer demographic that every single UK adviser should be concentrating on.
Bob Champion is chairman of the Air Later Life Academy
