Investing in our future

Susannah Streeter: Hello and welcome to Switch Your Money On from Hargreaves Lansdown. I’m Susannah Streeter, I’m Head of Money and Markets here at Hargreaves Lansdown. And, as usual, I’m here with Sarah Coles, our Head of Personal Finance. So Sarah, there has been plenty of debate about Martha Stewart as a swimsuit model at the age of 81. It’s not the kind of thing I can imagine my own grandmother doing at that kind of age but, as we’re living longer, we can all expect to carry on for a lot longer in whatever we do now.

Sarah Coles: Yes, I think I can carry on not being a swimwear model well into my 80s. But seriously, people’s plans for their 70s and 80s are far more exciting than they once were, with so many people living longer and wanting to live better as well.

Susannah Streeter: Yes, so this week we’re going to be looking at the investment implications for living longer in an episode we’re calling ‘Investing In Your Future’.

Sarah Coles: We’ll hear from Helen Morrissey about the impact that living longer has on pensions, and what we can do to prepare for the decades ahead.

Susannah Streeter: And we’re going to be speaking to Sophie Lund-Yates, our lead equity analyst, about investing for income as we get older.

Sarah Coles: Then, we’ll spend some time on the investing opportunities offered by the fact we’re living longer, and the companies that are benefiting as boomers reach older age. And we’ll be speaking to Nick Sanderson, the CEO from Audley Group, which runs retirement villages in the UK. He’s also chair of Arco, the trade body for the retirement living sector. And we’ll chat to him about the growth of luxury retirement living, which always makes me think of the Thursday Murder Club. So, Nick, there has been real growth at this end of the market hasn’t there.

Nick Sanderson: Yes, there absolutely has. We’re catching up with the rest of the world. America, Australia, New Zealand, with specialist communities for older people where they have a lot of active lifestyles as well as care when they need it and we’re a very long way behind here.

Susannah Streeter: Well thanks Nick, I’m really looking forward to hearing a lot more about what happens at the Audley Group. I just love the Thursday Murder club, by the way Sarah. It does seem appropriate that Richard Osman, the TV quizmaster supreme, has turned his hand to clue writing instead, doesn’t it?

Sarah Coles: Yes. I mean, he is one of my favourites.

Susannah Streeter: And what about you Nick?

Nick Sanderson: His mother lives in a retirement community down in the South Downs. So, it was based on that and when it first came out, I was assured that she lived in one of our villages until I found that she didn’t.

Susannah Streeter: You never know. You never know. I think there’s plenty of books and films to come. But, anyway, if you want to get clued up about what’s happening in the world of funds, Emma Wall, our Head of Investment Analysis and research at Hargreaves Lansdown will be talking us through her thoughts on funds for retirement income. So, when we look at longevity, we have to consider two things - just how long today’s babies are expected to live, and how long today’s 65-year-olds are expected to live, and this really is key when you’re taking about living for longer. So, in 2020, the average man of 65 could expect to live another 20 years and the average woman 22 years.

Sarah Coles: Yes and, in the past decade, this has risen but at a slower pace compared to the previous couple of decades. But it still shows there’s plenty of life left in us at 65. It means we need to have plenty of assets to use at this stage, and the good news is that on average, older people actually do have money to spend. Clearly, there are vast differences as there are with any age group. But those households, where the head is retired, are the wealthiest, with average wealth of around £489,000. And that’s partly because almost three quarters own their home outright.

Susannah Streeter: There’s the concern that this won’t always be the case, as rising prices make it harder to get onto the property ladder, and more people hold defined contribution pensions rather than a defined benefit one. It’s one reason why our research this month showed that one in three people who expect an inheritance, or already had one, say they’ll need to use it to help fund their retirement. There is a lot riding on the value of bricks and mortar it seems. So, it’s going to be vital to have the right plans in place. This feels like a really good time to bring in Helen Morrissey, Head of Retirement Analysis at Hargreaves Lansdown. We were just then talking about life expectancy, Helen, and obviously this has a huge impact on our retirement planning, doesn’t it?

Helen Morrissey: Yes, the concern is that people underestimate how long they are going to live and, as a result, don’t save enough to give them a decent income all the way through retirement. People tend to look at their parents and grandparents and think they will live to a similar age when, in fact, they could be living much longer. We did a quick poll on LinkedIn a couple of weeks ago asking people how long they think they’ll be retired for. Around 8% thought they would live less than ten years in retirement, which is way off in most cases. A further 31% said they expected retirement to last up to 20 years which is getting closer to the right ballpark but is still likely to be underestimating it for many people and they could find themselves underprepared for retirement with little time to do anything about it.

Sarah Coles: Yes, so that’s the big issue, isn’t it? You could be retired for decades. So how much do you actually need to save?

Helen Morrissey: So, that’s an interesting one. The Pensions and Lifetime Savings Association have produced their Retirement Income Standards which I think are really helpful. According to the PLSA if you want a minimum standard of income in retirement you should be looking at spending around £12,800 per year for a single person or around £20,000 for a couple. Now, that will cover your basics and a few extras, but you wouldn’t be able to run a car or go on holiday overseas for instance. A moderate retirement income standard would be more like £23,300 per year for a single person and £34,000 a year for a couple. This would get you an overseas holiday and the ability to run a car. Now, if you’re after something more luxurious, we are looking at more like £37,300 per year for a single person and £54,500 for a couple. If you live in London, have social care costs or don’t own your home outright these numbers will likely be higher.

Susannah Streeter: Can you break that down, Helen, into the size of pension pot you might need?

Helen Morrissey: Yeah, okay. So, when the PLSA did the research they estimated a couple would need pension pots of around £121,000 each to get up to the moderate standard of living and £328,000 each to get to the more comfortable standard. The minimum standard of living would be largely covered by a full new state pension for a single person and for a couple it would cover them. This was based on annuity rates of £6,200 per £100,000 and both partners having a full new state pension which is currently £10,600 per year each.

Sarah Coles: So, it looks pretty clear that we’re going to have to have a real plan in place if we are going to be able to properly afford the retirement we want, and of course, we need to make sure we contribute as much as we can reasonably afford to. I suppose it also shows the importance of the state pension in helping people build up their standard of living in retirement.

Helen Morrissey: You are right. The state pension is the very backbone of people’s retirement planning but, as the population ages, we are seeing it coming under real pressure. As the state pension bill booms the government is always looking at how to keep a lid on its cost and we’ve seen a lot of debate on whether state pension age increases need to be accelerated to manage these costs. However, this means we face the difficult decision of either having to work longer until we receive it, or else, we have to save even more into our pensions to give us the flexibility to retire early if we need to.

Susannah Streeter: So, Helen, we’ve also seen the removal of the Lifetime Allowance, which should mean people can continue to save without being clobbered by another tax bill.

Helen Morrissey: Yes, in theory but it’s worth saying that Labour has said they plan to reverse this if they get into power, so that has thrown people’s plans into uncertainty. With a general election looming in the not-too-distant future, it’s an uncertainty that people could do without.

Susannah Streeter: Okay, well thank you Helen for bringing a bit more certainty into the equation. But there still is plenty of food for thought there. We talked a little about the need to invest more for our retirements, and one thing people might think about at a time like this is dividend income. So, this feels like a super good time to bring in Sophie Lund-Yates. So, Sophie, we know that when it comes to investments in retirement, there’s more of a focus on income. So that’s stocks that could provide a level of income through dividends, rather than growth in the share price. Who have you looked at?

Sophie Lund-Yates: Thanks Susannah. First things first, I should say that yields are variable and shouldn’t be taken in isolation as a reliable indicator of future income. This means staying invested through retirement won’t be right for everyone and it’s important to weigh up the benefits and risks of secure and flexible retirement options. There are certain companies who are more geared towards dividends and have a better ability to pay them than others. One of those types has typically been utilities. That’s because they offer an essential service, meaning revenue should, in theory, be more steady than some other types of business. I’ve been looking at National Grid with this in mind. National Grid is one of the world’s largest investor-owned energy utilities, responsible for delivering electricity and gas to homes and communities across an enormous network. As a bit of context, the group has close to 20,000 miles of electricity and gas transmission and distribution networks, so everything from those overhead cables you see running through the country, and gas pipes. And that’s a highly simplified version if I’m being completely honest. There’s simply not many companies that can do what National Grid does, and it’s also pushing very hard on the green energy front, with huge efforts to accelerate electrification. This comes with very large investment needs though, which together with regulatory action because of the cost-of-living crisis is keeping a lid on profits. The overall relative steadiness of the group’s revenue feeds into a forward dividend yield of 5.3%, which isn’t insignificant but isn’t guaranteed. I’d caveat slightly with the fact National Grid’s valuation faces a little bit more uncertainty than some other companies because of the nature of the electric strategy shift.

Sarah Coles: So, Sophie, you’ve had a dig into a tobacco giant too which, if I’m honest, seems a bit back to front when we’re talking about people living longer!

Sophie Lund-Yates: You’re totally right, I’ve looked at British American Tobacco, or BATS, and there are some things that needs addressing first and foremost. As you were just hinting there, the sensitive nature of tobacco stocks means that many institutional, or even individual investors can't, or won't, invest in the sector. That can keep a lid on demand, and therefore valuation. News of a hefty $635,000,000 settlement with the US authorities over historical dealings in North Korea, has seen BATS’ sentiment come under further pressure, too. With most of this penalty already accounted for in last year's costs, I’m not overly concerned with that financially but it’s something more socially-minded investors may want to consider. From a purely investment perspective, tobacco stocks have a stronger ability to pay dividends. Demand is reliable because of the nature of selling an addictive product. There’s a big focus on returns to shareholders, because of the ceiling on valuations, which makes them potentially interesting options for income. BATS is a juggernaut, and despite industry challenges, market forecasts expect revenue to continue to inch towards the £30,000,000,000 mark over the next couple of years. That scale combined with incredible pricing power has resulted in operating margins other consumer goods companies can only dream of. And, with relatively low capital requirements, the group's delivered prestigious amounts of cash despite falling volumes. Debt is worth keeping an eye on, and that’s why the group’s paused its share buyback programme. A key attraction for investors is likely to be the 9.4% prospective yield, which is one of the highest in the FTSE 100. Analyst forecasts suggest this year's dividend payments are 1.6 times covered by free cash flow which provides some comfort that the yield is sustainable. But, once again, it’s really important to stress that no dividends can ever be guaranteed. For investors looking for more blue-sky potential, BATS is one of the more exciting names in new categories of tobacco products, which is things like vapes and heated tobacco, but whilst that part of the business is still loss making, caution would be advised.

Susannah Streeter: Okay, thanks Sophie. So, what’s the final name for this week?

Sophie Lund-Yates: I’ve talked about how complex companies that offer essential services can be more interesting when looking at dividend potential, and I think Verizon falls into that category. Verizon is US-based and is a telecommunications giant. I can’t, in good faith, say it’s the most interesting stock in the world, but there are some points to consider. There are only a very small handful of businesses that can do what it does, and I think we’d all agree that internet and phone coverage are essentials rather than nice-to-haves in today’s world. Consumer is, by far, the larger of its two primary segments. It provides mobile and landline services directly to individuals and via wholesalers as well as selling devices like smartphones and laptops. The business segment offers similar services to companies and government organisations. More broadband connections, and increasing demand for smartphones, have historically provided a favourable backdrop to the group. Equipment sales act as a revenue diversifier. But subscriptions are where the real moneys at. Once the group's paid for its infrastructure, each new client drops straight through to profit. Verizon is also throwing an awful lot at the roll out of 5G which, although potentially exciting, is still in early stages so there’s a risk involved because of the level of investment. There are also competitive angles to consider, although there aren’t too many fighters in the arena, wireless providers are basically only differentiated by price which can make it tougher to inflate margins. Overall, Verizon generates shed loads of cash, and that helps underpin the 7.4% dividend yield.

Sarah Coles: Thanks Sophie, you’ve got quite a range of things to consider there. So, thanks very much for that. I should say that this is not personal advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment. Investing in an individual company isn’t right for everyone because if that company fails, you could lose your whole investment. Of course, we all need to think about living longer and the impact on our own financial lives, but when so many of us are living longer, it also opens up new opportunities for businesses.

Susannah Streeter: Certainly does, Sarah, so this does feel like a good time to bring in Nick Sanderson from Audley Group, which runs 20 retirement villages in the UK, which include retirement properties featuring really high-end facilities like a health and fitness club, spas, tennis courts and a restaurant. So, plenty to keep you occupied. So, Nick, tell me who the typical retiree is in one of your villages.

Nick Sanderson: We have two brands actually. We have Audley, which is our more premium brand, and Mayfield, which is emerging at mid-market offer. But our Audley customers are typically some of the people you’ve described actually. They are, almost without exception, homeowners who sold their home and downsized to buy in one of our villages. They are, as you would expect, people who have been successful in their lives, who have built up a big capital value in their home as well as savings and income. And are deciding, I think quite appropriately, that it’s probably not the most efficient thing to do to stay in their existing large family home with so much capital tied up in it. Choosing to, what the Americans would call, ‘right-size’, move into something that’s age appropriate with a great lifestyle, as you mentioned, some of the facilities we’ve got. But, particularly, because of us, they also have the assurance that if they need anything later in life, in terms of support, we’re there to provide them right the way through till, hopefully, the end of their lives. So, you mentioned it earlier actually, it’s our slogan really, which is helping them to live better for longer.

Susannah Streeter: So, you mentioned ‘right-sizing’ there, but it still comes at quite a cost, doesn’t it?

Nick Sanderson: Yes, it does. There are two stages to the cost. There’s the capital cost and the revenue cost. The capital cost is equivalent to buying any new apartment in a location close to where they live. Whereas we stretch from Yorkshire to Devon to Kent and so it depends on the local housing market and the price of the actual property on entry is very similar to what they’d actually pay for an equivalent in just the general housing market. So, the average size of an Audley apartment is around 1,000 square feet, which gives you two bedrooms, two bathrooms, sitting room, dining room, outside space. And they’re probably selling a house maybe 50% or twice as big as that to downsize into that. But the price is very similar. So, if they’re selling at, I don’t know, £1,000,000, they’re probably buying from us at around £750,000 to £800,000. But then there are ongoing charges, yes, so they pay a management charge to enjoy all of the benefits of the facilities that are available. A bit like club membership, if you like. So, they’ve got the spa, the pool, the gym, a restaurant to enjoy and all the grounds that go with it. And then part of their fee is deferred until they leave. So, they pay a percentage of the value of their home when they leave. So, it's sort of converting revenue cost to capital cost, if you like.

Sarah Coles: Can you tell me a little bit about the demand for it? I mean, is there a lot of demand for property at this end?

Nick Sanderson: Do you know what actually, I think particularly for our Mayfield customers, which is closer to the mid-market, it’s huge. We’re very small, as I mentioned we’re only 50,000 units in the UK. There’s that number of units in Christchurch, New Zealand alone. So, we’re a long, long way off where we probably should be. I think a part of the apparent lack of demand is the lack of supply. There just isn’t the range of alternatives in this country to make that offer. If you went to the states, I mean, you could argue that Florida is one big retirement village. That’s what it is. People, sort of, flock from the north to go and live in Florida in their retirement. And most of them live in managed communities where there’s this range of services. So, it’s not through a lack of demand, it’s really through a lack of supply. Myself and my colleagues just haven’t done a good enough job at building enough of it. It does play in a bit to the housing supply situation in the UK. We know that we’re not building as many houses as we should be in the UK. And haven’t been for decades. Which means that the housing market for the limited land that’s available tends to be dominated by major house builders who, frankly, can build and sell anything they create. So, the incentive for them to buy into new markets, which they would consider includes older people, is pretty limited. So, the supply side is dominated by house builders who don’t really have any interest in it. So, it’s a bit of a niche market, at the moment. But it is growing significantly.

Susannah Streeter: Nick, do you think people who are approaching retirement underestimate just how much money they will need to really be able to afford the kind of facilities that you’ve been describing? Do you get disappointed people who maybe turn up at the showroom and think ‘actually, I just can’t stretch that far’?

Nick Sanderson: Yes, we do. And I’ll tell you what it is, I think, in part, I think you’d all recognise this in the work you do, many years ago we had a piece of research done by YouGov which asked people ‘do you believe you should spend all of your personal wealth before you die?’ And I think 83% of them said ‘yes’. You know, ‘there’s no pockets in shrouds, lets spend it all before I go’. And how well managed we’d all be if we got to that point. When we then said to them ‘and do you include your housing wealth in that?’ 95% of them said ‘no, I don’t’. Which is the legacy they think they’re passing on, in terms of inheritance. And that, I think, is the difference. That they don’t see the transfer of capital to revenue – to spend capital on revenue expenses. So, when I described how you pay for what you have with Audley, which is sell your house, downsize, release capital, they don’t see that as a source of potential revenue income to pay for ongoing charges. So, they typically have to be someone who has wealth generated from elsewhere that can create an income to allow them to meet those costs. And do they underestimate them? Well, with us not really because it’s very predictable. It’s fixed costs, it’s for the life of their occupancy. And where I think they may get it wrong is actually in anticipating their length of stay. Their longevity effectively. And, of course, part of what we do, hopefully, is to keep them living better for longer. It’s why rental has never caught on as much here as in the states, because people find it harder with a large rent payment to be able to predict what their likely expenses are going to be during their period of occupancy.

Sarah Coles: And, I suppose one of the great unknowns when you’re looking at this part of life is the cost of things like care. When people have care needs, is that something they will then have on top of, when they’re staying with you for example, or would you expect them to move on and sell up and use that money to pay for care?

Nick Sanderson: No, typically with us, I mean the whole point of us, a colleague said to me recently ‘I think our whole job is to keep people out of care homes’. Nobody ever wants to go into a care home if they can possibly avoid it. Nor indeed be in a bed in a hospital without being able to be discharged. So, our job is to have people in the right housing, built for purpose, safer. And then provide them with an environment which will keep them safer for longer, which will reduce the chances of them needing very expensive care later in their lives. But that’s done partly by us introducing support to them through their years. So, we have care staff on site who can help them with basic daily functions, getting up and going to bed, shopping, delivering meals etc. Which will allow them to stay independent for longer. So, it comes but, hopefully, at a much lower cost than what typically happens in the UK, which is that people do nothing, deny they need any help – I’m sure you’ve got relatives who have said to you at times ‘leave me alone, I’m perfectly alright, I’m going to stay in this house until I fall down the stairs at which point it’s too late and I’ll have to stop.’ At which point, the cost becomes prohibitively expensive. This is a way of hopefully managing that process and making it more affordable. But yes, do they pay for care as they need it? They do. In this country, unless you’ve got assets of less than £24,000, everybody does.

Susannah Streeter: Sounds like you’re describing Elizabeth and her husband in the Thursday Murder Club there. But anyway, just going back to how you operate, what happens when it does come to the point where either people do leave, or they die in your villages? What happens to the resale value? How much can you resell the properties for? And can they still leave a legacy?

Nick Sanderson: Yes, that’s a really good question because it has been a sector problem. Which is one of the reasons I think it’s been held back. The traditional routes to retirement housing were, and I won’t name them, but there’s a dominant provider in the UK, or two actually, who provide a more traditional sheltered housing, retirement housing model. And, truthfully, their resale values have not been very strong. After the initial sale at a high value, the scheme becomes older and more mature and people age and resale values tend to be quite poor. That’s not the case either in Audley or in our sector. We’ve had a lot of work done by JLL recently which confirms that over the last 10 years, all of our prices have pretty much tracked house price inflation. So, generally speaking, if, going to my example of earlier, if someone buys an apartment from us for £500,000, the expectation is that when you come to sell it you will get your £500,000 plus normal house price inflation. We’ve got lots of evidence to show that part of the reason for that is because we’re sort of aligned with our owners. Because, I mentioned earlier, some of our income comes from getting a percentage of the value when it’s sold. Which means we’re very much aligned with an owner or, indeed, with their families as inheritors to get them best value because a percentage of it comes to us as part of our remuneration. So, generally speaking, pretty good yes. And the legacy, they buy a long leasehold just like buying a normal flat in the high street from a major housebuilder. And that’s what they’ve got to sell at the end of it.

Sarah Coles: What we’re seeing at the moment is people amassing quite a lot of wealth as they get older. But, I mean, they’re sitting on housing wealth which they may have bought when it was a lot cheaper. And they’ve seen this phenomenal house growth. And then there’s a lot of people with final salary pension schemes. So, both of those things aren’t guaranteed to continue happening in the future. Do you have any concerns about whether this luxury lifestyle is going to be affordable to people as we get to 10, 20 years down the line?

Nick Sanderson: Well, that’s a good point. There’s also, interestingly, the demographic bulge is going to work its way through in the next 20 years. The baby boomers, post war babies. A lot of the demographic is changed. But, you know what? Supply is so limited in the UK that I think we’ll never get to a scale where it’s threatened. I think there are other countries where they may be getting close to the point where they may be vulnerable. But that point about housing wealth is a very valid one. It’s one we’re very aware of. You know, people talk about our customers, over 65s, as having two trillion pounds worth of housing, somethings only worth two trillion pounds if there’s someone with two trillion pounds to buy it. And, ironically, their children and grandchildren are struggling to buy their own housing. So, the idea that that wealth is recycled to the generations down to buy the asset that they’re supposed to be inheriting, well, there is a word for that which I won’t use on this podcast. But it’s caused the financial downfall of many organisations assuming that goes on forever. So, we’re very sensitive to that. But there are ways we can introduce mechanisms to make it more affordable. Is it a way of meaning that they will reduce costs later in life by avoiding expensive care? Yes. Is it actually just something that people will enjoy and get fun from? Yes.

Susannah Streeter: So, thanks Nick. I mean, really fascinating. It does seem to be a retirement we’d all quite like. In fact, I’ve been talking to my friends recently about us all planning to live in the same village. We’d all be aging ravers I think.

Nick Sanderson: That’s what we do, basically. It’s a great community. It’s sort of replicating the way communities used to be. So rather than get a house in a different village, just come and live in one of ours, I recommend it.

Sarah Coles: The idea of aging ravers is quite terrifying to me. I shall be one of the aging quiet people who sits very quietly in my home.

Susannah Streeter: Okay, now I’d like to bring in Emma Wall our Head of Investment Analysis and Research here at Hargreaves Lansdown. Emma, you’ve been looking into retirement income from funds, haven’t you?

Emma Wall: Yes. We think funds could be a good way to generate income from a basket of different companies. We think this can reduce risk as you diversify your income stream, although yields can be variable and are not guaranteed. So, we’ve picked three funds which can take charges from capital which can increase the yield but can decrease the potential for capital growth.

Susannah Streeter: So, what’s the first one?

Emma Wall: The first one is Artemis Income, which aims to provide investors with a steady and growing income, alongside capital growth over the long term. The managers Adrian Frost, Nick Shenton and Andy Marsh invest mainly in larger UK companies but they also invest in some medium sized and overseas companies when they find great opportunities. So, the managers look for companies with recurring revenues and that’s because these businesses are more likely to have consumers, and therefore profits, and therefore dividends in the future. So, we think the managers combine skill, discipline and experience, putting them in a strong position to deliver healthy income and long-term growth. But, as ever, there are no guarantees.

Sarah Coles: So, you’ve also been looking at a European fund, haven’t you?

Emma Wall: Yes, absolutely. This is the Polar Capital European Ex UK Income Fund. This also aims to deliver an income of greater than the index. That’s the MSCI Europe Ex UK index. And it aims to grow investors’ money over the long term with fewer ups and downs along the way. The manager, Nick Davis, mainly invests in larger European countries that he thinks are undervalued but have the potential to bounce back. He aims to invest in cash generative businesses with strong balance sheets and a competitive position that others may struggle to replicate. Given the fund’s income focus, Davis wants to invest in companies yielding at least 2.5% with the potential to grow their dividends over time. The fund can be quite concentrated, which does add risk, and the manager also has the flexibility to use derivatives which can magnify any gains or losses, and also increases risk. But we do like the defensive nature of the approach and disciplined investment process.

Susannah Streeter: And what’s your final idea?

Emma Wall: A fixed income, or bond fund. And that’s from Royal London. It’s Royal London Corporate Bond. And this aims to provide investors with an income, alongside some capital growth from investing in investment grade bonds. So, managers Shalin Shah and Matthew Franklin believe credit markets are inefficient and therefore offer opportunities that active managers can exploit. So, the managers start by forming a view on the direction of the economy and considering factors like economic growth, inflation and interest rates, quite difficult to do at the moment. This helps them decide which areas are best to invest in. And then, Shah and Franklin feed off ideas from the wider investment team, the fixed interest investment team at Royal London. And they also do their own research. We think the team’s edge comes from their detailed research into lower profile parts of the market. The fund has a focus on the lower quality end of investment grade corporate bonds, which can make it more adventurous. And it invests in more high risk, high yield, unrated bonds, which can add risk.

Sarah Coles: Thanks, Emma. There’s loads to look into there. I should add that, before investing in a fund, you should make sure the fund’s objectives align with your own and you understand the fund’s specific risks. Any new investment should form part of a diversified portfolio, and if you’re not sure what’s right for your circumstances you should ask for advice. As always, there are no guarantees with investing. All investments can fall as well as rise in value, so you could get back less than you put in.

Susannah Streeter: You’re listening to Switch your money on from Hargreaves Lansdown. And now it’s that time for our stat of the week. And I thought we should close with an idea of just how many people are 65 or over, and how society is aging. So, I went to the Census from 2021, super busy in my job, you just get into everything it seems, and compared it to ten years earlier. So, Sarah, if the number of people aged 65 and over was 9.2 million in 2011. What do you reckon it is now?

Sarah Coles: Well, I think it’s probably safe to assume it has grown and I guess it’s in double figures by now. Let say it’s gained a 1 million.

Susannah Streeter: Actually, it’s a bit more than that, there are 11 million people aged 65 and over in the UK, and that’s almost a fifth of the population.

Sarah Coles: I’d say that’s a huge demand for retirement properties. But, then again, an increasing number of them won’t have retired yet. And, of course, when we get to that age, we’ll probably have to work for even longer.

Susannah Streeter: Darn and I was hoping I’d have plenty of time to get stuck into more whodunnits instead.

Sarah Coles: I was thinking about your love for whodunnits and, in Thursday Murder Club terms, I think you’d make a great Elizabeth.

Susannah Streeter: Why, thank you. I better get back to my clues. That’s all from us this time, but before we go, we need to remind you that this was recorded on 30 May 2023, and all information was correct at the time of recording.

Sarah Coles: Nothing in this podcast is personal advice. You should seek advice if you’re not sure what’s right for you. Unlike the security offered by cash, investments rise and fall in value, so you could get back less than you invest. And this hasn’t been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication.

Susannah Streeter: Non-independent research is not subject to FCA rules prohibiting dealing ahead of research, however HL has put controls in place (including dealing restrictions, physical and information barriers) to manage potential conflicts of interest presented by such dealing.

Sarah Coles: You can see our full non-independent research disclosure on our website for more information. So, all that’s left is for me to thank our guests, Nick, Sophie, Helen, Emma and our producer, Elizabeth Hotson.

Susannah Streeter: Thank you so much for listening. We’ll be back again soon, goodbye.