These repayments, plus the loan interest, become a form of additional taxation coming at the very same time as they will be faced with even higher taxation to pay the cost of baby-boomers pensions and care.
However, returning to my subject of retirement, we are starting to see a significant change in attitude.
Those that are able to are now deferring it for as long as they can and in this they should be encouraged, not only to better look after themselves but also to continue contributing to society through taxation, while they still can.
There is also the issue of how the retired will keep themselves occupied. The thought of getting off the wheel of a nine-to-five life, clearly has appeal to many.
However, as it approaches and they start to ponder what they will do with all those free hours, many are now happily opting to defer it if they can.
Therefore, I believe we will increasingly see a widespread recognition of the concept of “peak savings”, probably not far off the age of 65.
That will be followed by a desire to continue working to remain occupied and to supplement the family coffers, whilst looking for less stressful employment that affords more leisure time.
How should we, as financial advisers, respond to this? To begin with we should no longer ask clients for their intended retirement date and go on to base everything around this. Instead, we should treat our clients as “still saving” or “no longer saving”.
As such, our role should be to assist in identifying their peak savings tipping point and help our clients both in the ascent to reach their savings summit, so that they may enjoy life after full-time work, and then help to manage the way down on the other side.
That’s how we can best facilitate an optimal balance between a life well-lived and the desire to leave something behind for our loved ones.
Paul Killik is founder and senior executive of Killik & Co
