Demand for retirement advice has increased because of the current economic situation and future changes to the funding of social care, according to a new report.

Advisers estimate retirement advice accounts for 58% of their assets under advice, up from 55% the previous year.

They expect demand to continue to rise, and that it will reach 62% of their assets under advice over the next three years.

The figures are contained in the fifth edition of retirement advice report Managing Lifetime Wealth: retirement planning in the UK, published by Aegon and NextWealth.

It maps how the industry has changed, and in some areas remained the same, across recent years to help understand the impact of regulatory changes as well as events such as COVID-19 and the cost-of-living crisis.

Ronnie Taylor, chief distribution officer at Aegon, said: “After a tumultuous time over the past year, with volatility in the markets and regulatory change, retirement advice has remained a vital element of the financial advice industry.

“It’s positive to see that sentiment among advisers around the retirement advice part of their businesses has lifted too.”

The positive view of the significance of retirement advice has been consistent throughout the five years of the study, he said.

Last year’s report revealed that changing attitudes to work were driving demand for retirement advice, as clients reassessed their priorities during the pandemic, with a marked increase in clients retiring early.

In this year’s report, advisers have attributed demand to uncertainty and volatility in the market with 57% of advisers expecting the current economic environment to increase demand for retirement advice.

Changes to the funding of social care is seen as the second biggest driver of demand for retirement advice according to advisers.

Although the research was carried out prior to the delay to the new social care funding deal, it demonstrates a key area of opportunity for advisers.

Mr Taylor said: “With many advised clients admitting they plan on reviewing how they manage their money, the findings highlight the value of getting professional advice.

“With the new Consumer Duty on its way, the research also indicates key opportunities for advisers to add value and deliver good outcomes for their clients into the future.”

Heather Hopkins, managing director of NextWealth, said: “Since starting this research in 2018, we’ve seen a number of significant events that have impacted the demand for retirement advice.

“Each of those events, whether economic, political, regulatory or health related, were very different in nature but all demonstrate the importance of good quality financial advice when times are uncertain. The resilience and adaptability of those providing this advice has never been more in focus as we move through 2023.”

• The latest research was conducted in November and December 2022 with 221 financial advisers and 209 consumers of retirement advice. This was supplemented with in-depth qualitative interviews.