‘Weights & measures’ of personal finance and retirement22 June 2022
Reaching back many decades ago, my first job offer was for an apprentice position in the weights and measures department of a large local aerospace company at the time (now long gone). There is some irony that the recruitment consultant who got me the interview operated from Shaw House, where Chapters Financial is now based. And before anyone asks, I was using metric at the time, and not imperial measures, as now seems a possibility!
If we think about personal finances now, 'weights' might be the financial pressure of the squeezed middle as they cope with rising costs and debt repayments, and 'measures' might be the daunting array of inflation increases and base rate rises we are currently seeing. For those over age 50, as an example, their focus from a 'measures' perspective might be the value of a pension fund and its real purchasing power, which in turn may well indicate when work can stop. It is noteworthy that annuity rates this year have been climbing (source: Canada Life) as economic factors have changed. Annuity purchase still largely remains limited, but can have its place, as our Retirement Options Schedule confirms here.
It is also important to consider the life phase in which a person finds themselves as they approach, enter, and hopefully enjoy retirement. These might be as follows:
- 60-73: the active years
These might be the truly active years, encompassing the more physical pursuits of hobbies and holidays to suit your busy diary. Perhaps you will be difficult to get hold of whilst you gallivant across the globe or involve yourself in new interests.
I appreciate that an active 75-year-old might close this blog down at this point, noting their plan to go sky-diving tomorrow, but bear with me. After all, Captain Sir Tom Moore said, 'Life is to be lived and I've always believed that age is no barrier to living it.' He certainly accomplished much and brought joy and light to the UK during the dark days of the COVID-19 pandemic.
- 73-81: the fulfilled years
A phasing-in of fulfilment and perhaps a slightly more relaxed agenda from the last decade or so might begin around this point. With many a pursuit, holiday or objective completed, the time to relax may have arrived, with more leisurely pastimes consuming the days and evenings. What's wanted will be treasured more, and what's not required may be discarded as time naturally becomes a somewhat dwindling commodity.
The needs of the family may become a more important feature of the calendar as you enjoy their company.
- 81+: the chilled years
Health and wellbeing may now be an important focus, and the body may simply not do what you want it to do, or not at least at the speed that it used to do it, but the mind still prances like a 25-year-old. Much to reflect on and enjoy in comfort, perhaps with some additional personal care required. The family may also be more involved in keeping an eye on you and making sure that personal standards, whatever they may be, are maintained and enhanced where possible.
As enjoyable a time as the first two phases, but maybe at a slower pace in the chilled years. Health of the mind and body may well dictate the quality of life in these latter years.
The 'weights and measures' of each stage of life may well have a bearing on the need for capital and income as time moves forward. We appreciate that each client is different (as indicated above) and will have an opinion on the age range characteristics we have noted. However, if these help to challenge thinking about what might be needed and when, that can only be a good thing.
Whatever your personal (and individual) circumstances are, 2022 may well bring its cost-of-living challenges. Please do take financial advice throughout all age ranges to ensure that your funds are doing what they need to meet your expectations, or to manage them.
The team at Chapters Financial can help and we look forward to speaking to you soon.
Keith Churchouse FPFS
CFP Chartered FCSI
Chartered Financial Planner
Chapters Financial Limited is authorised and regulated by the Financial Conduct Authority, number 402899