People who are in their 60s, mortgage-free and not bogged down by any personal loans are a vanishing species. If new research from Saga is to be believed, they are likely to be one of the last generations to enjoy this financial freedom in retirement. Along with the rise in divorce in the UK has come an increase in the number of people embarking on a second long-term relationship, many of whom go on to have more children later in life.

The right time for financial advice?

Saga Personal Finance has found that:

• One in eight of the over-50s still has a significant mortgage, estimated at £80,000 outstanding.
• The figure for so-called ‘second-lifers’ i.e. people aged 50 and above who have children with a new partner following a previous marriage or long-term relationship, is one in five.
• 1 in 17 people in their 50s said they were 41 years or older when their youngest child was born; meaning they’ll still be paying for teenage children’s driving lessons and university fees when they’re in their 60s.
• This same group of people are also likely to have non-mortgage debts, such as loans. Around 18% of those with a second family have an average of almost £12,000 of outstanding debts due largely to the constantly increasing cost of raising a child.

These days not everyone has the luxury of disposable income or a pot of money squirrelled away for tough times. The choices for people in this situation are limited. Data from Saga shows that around one in five people are releasing equity from their home to pay off their mortgage, while one in three used the service to clear debt. This is likely to mean that there will be little or no inheritance for children born later in their parents’ lives!
The important message here is that, from an early age, people need to keep a close eye on their finances. This means making sure they are getting the best deals, whether they’re borrowing money or investing it. Those who previously thought that Financial Advice was for people with ‘spare money’ need to be aware that it is vital for most people to look at money objectively at every stage of life.

No matter what their life stage, all clients can benefit from financial advice:

Starting Out

Clients are likely to be facing high levels of debt, varying cash flow needs and have a high disposable income. An adviser can help clients to gain and retain financial control by recommending strategies for:

    • • cash flow management
    • • debt reduction
    • • wealth creation

Mid-Life Changes

Most life changes like marriage, divorce, children, redundancy or a career change affect a client's financial position. Clients may experience varying levels of income, have tax considerations and be worried about their future. Once a financial adviser understands a client’s overall position they can advise on strategies for:

  • • wealth creation
  • • investment
  • • financial protection

In or Near Retirement

Clients in this life stage are likely to be worrying about their retirement and other savings.

  • • How much money will they need?
  • • Do they have enough?
  • • Will their money last?
  • • Have they made the right choices?

A financial adviser will help these clients:

  • • work out how much they need now and in the future
  • • understand cash flow needs
  • • structure their investments
  • • put in place pension strategies