Intergenerational pension planning

Are you looking for ways to future-proof your business and build your client bank?

With £5.5 trillion expected to pass to the next generation in the UK in the next 30 years1, perhaps the solution lies in your existing client bank - or more specifically, your clients’ children or grandchildren.

What generations make up your client bank?

14.6m of the UK population are baby boomers aged 55 to 74

13.2m of the UK population are Generation X aged 40 to 54

13.4m of the UK population are Millennials aged 25 to 39

Source:
2018-based National Population Projections, Office for National Statistics (ONS), published 21 October 2019. 

Where will your future clients come from?

Providing family-level planning to your clients gives you the opportunity to build your client bank and generate additional income for your business.

Research has shown that:

Around £327bn is set to be passed from baby boomers to around 300,000 younger potential clients over the next decade

2/3 of the beneficiaries expecting to inherit more than £25,000 don’t have an adviser

46% of advisers don’t have any relationship with their clients’ children

Helping clients with an inheritance tax (IHT) problem  

Contributing into a pension on behalf of a child or grandchild is a great way to reduce IHT for your client's estate - it gives the recipient a pension for the future and creates an opportunity for you to develop relationships with family members and build up your client bank.

Read our case studies 3rd party contributions - saving for future generations part 1 and 
3rd party contributions – saving for future generations part 2 to find out more.

Engaging with beneficiaries

Here’s some tips on how to engage with beneficiaries:  

  1. Ask clients to bring their adult children to meetings, as they’re the ones most likely to inherit your clients’ assets.
  2. Clients' children are likely to have protection needs, which could be an opportunity to build a relationship with them.
  3. Include children as trustees if applicable. Holding significant roles in the process may encourage them to see you as an advice partner rather than their parent’s adviser.
  4. For wealthier clients, gifts out of normal expenditure can help.  Including the recipient in the plan on an ongoing basis could help you to retain them as a client.

Content to share with your clients

Making a Will guide
Download

When someone dies guide
Download

Power of Attorney guide
Download

Find out more

To find out more about intergenerational pension planning and the opportunities for you and your business, speak to your usual Royal London contact.

Source:
1 Passing on the Pounds report, Kings Court Trust, 2017.

2 Intergeneration advice: Seizing the opportunities presented by wealth transfer, Brooks MacDonald, May 2019.
3 The Great Wealth Transfer, Octopus Investments, January 2019.

This website is intended for financial advisers only and shouldn't be relied upon by any other person. If you are not an adviser please visit royallondon.com.

The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The firm is on the Financial Services Register, registration number 117672. It provides life assurance and pensions. Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street, London, EC3V 0RL.