Multi-generational living, higher divorce rates and property prices are changing the shape of future retirement, according to a new report.
Retirees with complex families and complex finances are expected to be the largest group by 2035, according to research by forecasting agency Trajectory Partnerships.
This set of pensioners will possibly be on their second marriage taking care of both partners’ children and their parents’ financial needs — complicating their financial situation.
The second group expected to grow significantly is late financial bloomers who achieve financial stability later in life. These retirees are likely to have got married, bought their first property and had children later. Currently they make up just 6% of the market but are expected to grow significantly over time.
By 2035, the number of over 60s in the UK will have grown by a third and the majority of these new retirees will be experiencing new retirement journeys driven by the fragmenting of traditional lifestyles, says the research commissioned by Canada Life.
Marrying later in life, the increase in divorce among over 60s and the rise of single-person households are just a few of the factors changing the financial fortunes of retirees.
Today, financially mature and stress free retirees make up 18% of over 65s. This group has strong financial foundations due to good fortune in their family and working lives. However, they are expected to decrease as a proportion of the overall market over the next 15 years.
The research also identified the connection between health and retirement wealth, which characterises two further groups of retirees healthy but not wealthy, and, unhealthy and not wealthy. This second group which make up 23% of today's market suffer from poor health and finances and the connection between the two makes it difficult to break the cycle.
“Retirement is changing as the over 60s reflect the increasing diversity in how we all live our lives. Understanding the impact of our lifestyles on our ability to save for retirement is essential and enables us to plan and ultimately realise our individual vision for our retirement years,” said Sean Christian, managing director, Wealth Management Division, Canada Life UK.