Financial Uncertainty Fuels 53% Surge in Retirement Plan Searches as 39% Remain Unaware of Pension Performance

• High Net Worths Seek on Average £900k+ Nest Egg for Retirement Peace of Mind

• Study Finds High Net Worth Men Require Larger Nest Egg for Comfortable Retirement Than Women
• Financial Uncertainty Rises: 1 in 4 of UK’s High Net Worth Individuals Unaware of Pension Performance
• Confidence High: 80% of UK’s High Net Worth Individuals Eye Retirement at 62, Yet 39% Unaware of Pension Holdings

 
Research conducted by private and commercial bank, Arbuthnot Latham, has uncovered surprising knowledge gaps amongst the UK’s wealthiest when it comes to retirement planning.
 
To bridge the gap between high-net-worth individuals and their financial providers, Arbuthnot Latham has explored their current retirement strategies, where the need for more information lies, and how to tackle their priority financial planning objectives.
 

UK’s High Net Worth Seek Surprisingly Low Nest Egg for Financial Peace of Mind

 
Arbuthnot Latham’s survey reveals that most of the UK’s most affluent individuals feel confident retiring with a nest-egg averaging just over £900,000 (£900,977) – around £45,000 per annum for 20 years.

Interestingly, gender plays a significant role in requirements for financial peace of mind. While affluent women state they require just over £800,000, their male counterparts say they need closer to a million in the bank to feel financially stable.
 

• Male average: £934,957.26
• Female average: £829,109.264

 
This aligns with data throughout the survey that suggests affluent women display greater frugality than affluent men. For example, high net worth women are far more prepared than men to reduce personal spending on luxury items and leisure to save for retirement.
 

• 53% Surge in Retirement Plan Demand as 1 in 4 Remain Unaware of Pension Performance

 
With a 53% increase in demand for people searching for ‘retirement strategies’ online, interest in future planning is clear. However, there appears to be a gap between this demand and visibility amongst the UK’s wealthiest over the resources that will be available to them when they retire.

Arbuthnot Latham’s study uncovered that although 51% of the UK’s high net worth aim to retire at 62, only 1 in 4 are aware of the value of their pension. This likely accounts for the rising fears surrounding lifestyle maintenance in later life, shared by over 50% of high-net-worth individuals surveyed. To reduce financial stressors and ensure a comfortable retirement, expert guidance and support on future planning is key. Chris Allen, Director, Wealth Planning, Arbuthnot Latham, said:

“A £900,000 pension pot is a challenging goal for many to achieve, therefore, the earlier you save for retirement, the greater your chance of achieving this objective. The impact of compound investment growth is especially powerful the earlier you save.

“Pensions are extremely attractive vehicles from a tax efficiency perspective, which includes the tax reliefs obtainable, to the efficiency of investing within these wrappers. This is a reason pension planning should be a priority.”
 

• Financial Peace of Mind: Future Planning to Relieve Top 3 Concerns of the UK’s High Net Worth

 
To ensure the UK’s wealthiest have greater visibility and control over their top financial concerns, Chris Allen, Director, Wealth Planning, Arbuthnot Latham suggests the following:
 

Maintaining Lifestyle Later in Life:

 
“Start planning for retirement early – Begin saving and investing for retirement as soon as possible to build a sufficient nest egg. We would recommend working with a financial advisor to create a comprehensive retirement plan. This includes using cash flow forecasting to help assess your current financial situation, estimating future expenses, and developing a strategy to ensure you can achieve your desired lifestyle during retirement.”
 

Value of Investments:

 
“Diversify your investment portfolio – spread investments across different asset classes (equities, fixed interest, property, alternatives such as hedge funds/absolute returns funds) to manage volatility and attempt to achieve good, risk-adjusted returns. Stay informed and updated: regularly review and adjust your investment strategy based on changing market conditions, economic trends, and your own financial goals.

Seeking professional advice. A consultation with a financial advisor to assess your investment objectives, risk tolerance, and creating a personalised investment plan can help ease your investment concerns by ensuring your assets are being managed by professionals with the ultimate aim of achieving your objectives.”
 

Providing for Future Generations:

 
“The right money in the right hands at the right time. This is the starting point for estate planning and moving assets down the family tree. Deciding how, and when, you want your beneficiaries to receive your assets is crucial to devising a personalised plan to achieve this objective. This could incorporate a range of planning tools, including trusts, but the housekeeping must not be ignored. Make sure you have an up-to-date will and powers of attorney in place.

We work with our clients and their family supporting education for beneficiaries about finances and what different tax wrappers are. This will help them greatly at the point they receive this wealth so that is it not so overwhelming.”

Sources & methodology: Arbuthnot Latham partnered with Atomik Research, an independent market research agency, to survey more than 500 UK residents with investible assets of at least £100,000, which took place between 30 November and 5 December 2023. 60% of respondents have a net worth (excluding property assets) of between £100,000 and £499,000, and 40% have at least £500,000. Investible assets exclude property wealth.