Ways of staying financially strong in later life

Les mayhew.PNG

I normally write about money, particularly about saving for retirement. Over the last couple of evenings, I’ve been lucky enough to attend two excellent discussions, not about saving, but about creating an infrastructure around you in later years that makes those years comfortable and helps you enjoy your financial freedom

    1. The CSFI has published Les Mayhew’s “the Dependency Trap – are we fit enough to face to future?” , which looks at how we can get more productive as we get older.
    2. The ILC has published “Stronger Foundations” which looks at how we can have more certainty about where we live and how much it will cost us to get the care to live there!

Of course as a 56 year old, these questions are new to me. I have thought about fitness in a competitive sense , not as a means to stay productive. Making this paradigm shift to “looking after myself” is an intellectual not a practical exercise. But Les made me sit up and think just exactly how I’m going to keep working unless I get fitter.

Meanwhile Dr Brian Beach and L&G’s Phil Bayliss helped me think about the kind of place I’d like to end my days living in, a place where I have extra-care at hand if I need it and somewhere where I can be either independent and dependent – without having to disrupt my lifestyle.

It seemed – while finding out about both approaches to later life well-being, that this academic research was at one or two stages removed from those people who could best apply it – the research was of academic interest but I wondered if people were applying it to their, or their client’s planning.

The link back to my world was through the idea of patient capital. It is really pleasing to see pension funds investing in the long-term housing stock that can provide generation after generation of pensioners with “extra-care”. That we are now thinking again , through CDC of long-term investment strategies that do not need to be gilt-based, opens the door for such patient capital projects.

To put it in less financial terms, it would be nice to think that the pension that was paid into your bank account had been generated from the happy investments of pensioners like you. It would be good to think that the financing of one’s own housing and care needs, was linked to one’s own savings – rather than from an annuity or works pension, in which you had no emotional interest.

I like this phrase, emotional interest and I am tempted to extend it to “emotional capital”, as there is definitely something “extra” in having an emotional engagement with the what you invest in.

I like too, Les Mayhew’s contention that “active-ageing would result in people with competing interests  “old/young”, “poorer/richer”, “male/female” being in better balance. Infact, the biggest dividends from “getting fit enough for the future” are for those who have had least benefit from the financial system. It does not cost a lot to get fit and being fit to work in later age benefits those without much pension more than anyone else!

But being fit, appeals to me too – and I am someone who has got decent pensions and better prospects to come. I am incentivised to live longer because I intend to convert my pot to pension and I damn well expect value for money in that conversion. I will take my chances with being struck down in my sixties and seventies. I want to enjoy my eighties and nineties and for that reason, I am going to start thinking now about how I stay fit and where I want to live in twenty years time.

Having the money without a life is nothing! Being financially strong – means having something to spend the money on! Bring on that need!

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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5 Responses to Ways of staying financially strong in later life

  1. John Mather says:

    Persuading clients to become interested in the quality of life is an integral part of whole of client advising. You might take a look at the book Younger Next Year by Croxley and Lodge from Workman Publishing

    Solutions should also consider the impact of major initiatives such as the G20 & OECD Base Erosion & Profit Shifting legislation which will shape the fiscal landscape of our futures. Taxation is after all a major consideration on the ability of your life time income to sustain you the cost of living differences are quite substantial. I looked this week at income for a client moving to New Zealand where the tax cost on income is 23% less in another case London property at €22,000 Square meter is being replaced by a main home at €4,000 Add this dimension concerning residence and domicile and you may find that a bespoke solution requires radical action.

    One of our solutions to the current rudderless journey our leaders are taking us on is ExBrit

  2. Adrian Boulding says:

    Henry, I believe that going forward people will not see an annuity as something different from one’s own savings, as you suggest here, but very much as part of their own savings

    Advisers in particular will help customers to take a holistic view, blending annuities with other savings vehicles to meet the varied needs of the retired


    • Mark Meldon says:

      A fine comment; many client’s secure their “baseline” income through DB or annuity income, then “top-up” using FAD/ISA/Whatever. Too many, however, readily confuse capital assets with income. I’m with the Victorians and Edwardians – income, not masses of capital, is a key component of a long and healthy (physical and mental health) “retirement”.

      Shame the next generation – including me! – are less well provided for!

    • henry tapper says:

      Will most people have advisers? There are 10m new savers but only 20,000 advisers. I suspect that the advisers will talk to the wealthy and leave the rest of us alone

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