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Nearly half of advisers considering further retirement income qualifications post Budget

  • Post Budget nearly half (45%) of advisers are looking at taking further qualifications to increase the range of retirement products they can sell
  • More than three quarters (83%) of advisers believe that there will be an increase in demand for products with a guarantee
  • The majority (54%) of advisers do not believe that retirees will blow their pension savings
  • Nine out of ten (92%) advisers believe that the pension reforms will increase engagement with the market

New research from retirement specialist LV= reveals that nearly half (45%) of advisers are considering gaining further retirement income qualifications in order to meet the expected change in retiring clients’ income demands.

Retirees will have more choice as to how they structure their income in retirement and eight in ten (83%) advisers believe there will be an increase in client demand for products that have a guaranteed element. This echoes previous LV= research which revealed that since the Budget, three quarters (72%) of advisers had clients who had already requested a product that offers them a guaranteed income and future flexibility.

One of the most noteworthy changes announced in the Budget is the option for retirees to withdraw their entire pension pot from April 2015. Whilst there has been much debate over whether this change will lead to retirees blowing their pension savings, the research reveals that over half (54%) of advisers believe that clients will be far more conservative than has been suggested.

Although the pension reforms took the industry by surprise, the majority of advisers are feeling positive about the Budget’s impact. Indeed nine out of ten (92%) advisers believe that the changes will lead to more people engaging with the pension industry, with eight in ten advisers expecting it to encourage more pension saving.

Steve Lewis, LV= Head of Distribution for Retirement Solutions at LV=, said: “We expect the pension reforms to lead to drawdown and equity release becoming mainstream solutions so it is reassuring to see that advisers are looking into getting additional certifications to reflect the expected increase in demand for these products.

“Although retirees will be looking for more income flexibility many will, of course, want income certainty and a solution that offers a guaranteed element. We recently launched a new investment option, our Flexible Guarantee Funds where clients can choose to buy a guarantee, which ensures that the value of their investment at the end of their selected term will be at least the same as their initial investment and it is proving to be a very attractive proposition.”

For further details on the LV= range of retirement products go to http://www.lv.com/adviser/retirement.


Notes

The research was carried out by LV= between 25 and 29 September 2014. The total sample size was 77 and was conducted in the form of surveys given out at one of LV=’s “Heart of Retirement” events.

FOR UK FINANCIAL ADVISERS ONLY
LV=, County Gates, Bournemouth, BH1 2NF, UK