This article is for professional investors only, and not intended for retail investors.

As the Government begins to ease the Covid-19 lockdown, a small level of normality is being resumed for some. But with mistrust in the stock market and financial anxiety high, what have we learned about planning for later life and how can investors be guided through this stage of financial planning in a time of such uncertainty?

For most, 2020 will be a financial year we will rather forget. The FTSE 100 Index experienced its second largest one day fall in history, 59% have reported a loss of income1 and there is discussion that the recession could turn into an entrenched depression. Those planning for a long retirement with heavy reliance on their hard-earned capital could be forgiven for shying away from any financial plan with the word investment attached. But this anxiety can lead people to retreat to perceived safe-haven assets like cash and forgo potential investment benefits. Stockpiling (cash not pasta) to provide for basic financial needs can result in capital erosion and leave other areas of later life planning, such as inheritance tax efficiency or flexible access, neglected.

Re-visit the later life investment objective

For many, the pandemic has brought about a focus on mortality. As a result, we have seen an increase in enquiries about passing wealth to loved ones efficiently, which is of course a crucial part of later life planning.

But I have written before about the importance of looking beyond legacy planning in achieving a holistic approach to later life planning. There are numerous objectives to meet simultaneously, including preserving assets, seeking a return to pay for retirement, avoiding volatility, optimising tax-efficiency, and planning for unpredictable costs such as care.

When planning in later life, most services neglect the majority of these outcomes, often focussing only on one aspect, such as income or tax efficiency rather than taking a holistic approach. In the current environment, which has created a lot of uncertainty and anxiety, re-visiting investors’ full range of objectives and focussing on the outcomes they require is key to not making uninformed, irreversible decisions.

Managed volatility

Most investors planning for later life are in the decumulation phase, with little or no new income and a focus on paying for retirement. To limit capital erosion, especially for those in the earlier stages of later life planning, a return on capital is therefore desirable and certainly should not be considered unattainable. However, when investments are relied upon for ongoing specific needs, volatility is the ever-present enemy. The recent volatility, though extreme, has heightened awareness of how investments can be impacted by market sentiment, so investors should be made aware of how to access the return required without the need for exposure to volatile markets.

Volatility risk can be mitigated by the use of unlisted investments that are not subject to the same systemic risk as all listed investments. For instance, private trading companies carry the benefits of being valued solely on their fundamentals, rather than short-term sentiment. To deliberately target predictable returns, they can engage in secured lending, meaning investors are not exposed to equity or operational risk. Lenders who select quality counterparties and operate under robust lending criteria, can achieve targeted, stable long-term returns.

Flexibility is king

Life is unpredictable and no matter what stage of life you are at, unexpected costs continue to present themselves. Be it a family wedding, home improvements or the cost of care for example, it pays to be able to access savings. Therefore, flexibility is key to later life planning and investors should be deterred from making irreversible decisions that may only meet their tax efficiency or income objectives but neglect the potential need to access their assets.

For example, there has been an increase in demand for fixed-term annuities since the Covid-19 pandemic2, and although this solves the problem of a reliable income, with no volatility, it removes the flexibility people in later life might need if their circumstances change.


Financial planning for inter-generational wealth transfer in the UK is needed as the country is set to hand over £55tn2 between generations over the next 40 years. But as we all live longer, investment objectives are becoming more complex and varied, putting great onus on the financial adviser to deliver a flexible solution to best ensure an optimal client outcome. Ingenious Estate Planning is a family of flexible services that focus on outcomes in later life, targeting low volatility and steady return, investing in companies that should qualify the investment for inheritance tax relief after two years.

For more information on Ingenious Estate Planning Services, contact our client relationship team at

– 1Source: ONS: Personal and economic well-being in Great Britain, May 2020

– 2 Source: The Great Wealth Transfer is Coming, Putting Advisers at Risk, July 2015

First published on EPrivateClient