Who wants to work forever?
The traditional, segmented path of education, career and retirement are now blurring and overlapping and indeed reiterating in ways we couldn’t have foreseen 20-30 years ago. The shape of our working lives and our attitudes to working are changing at a rapid pace. If proof was needed there are numerous such examples in the recently released DWP report, Attitudes to Working in Later Life: British Social Attitudes 2015. We are not only seeing a shift towards working for longer, but also working in more varied career paths and with increasing flexibility at times when we need it most, be that old age or to cope with family demands from childcare or as a carer for relatives.
We are used to a model where children spend 15 years in education, as adults spend 40-50 years in work and live out the rest of their lives in retirement. None of those assumptions need hold true today. You can retrain at any age, change career when you like and never need retire if you don’t want or need to. The question will no longer be ‘how long do I have until I retire’, because such a point in time will be indiscernible for many, but ‘what I am going to do next’. That has to be an empowering message for the next generation that is all about taking control of your future, focusing on life as a series of phases each of which with an important role, and making clear that it’s never too late to change.
The report showed that 37% of 18-24 year olds expect to retire in their 70’s compared to 17% who responded accordingly from the whole sample. There is a generational trend driven by numerous economic, legislative and health factors that mean young people are not automatically assuming they will retire in their 60s on a comfortable pension. Indeed there are many people in their 60s now for whom the thought of cutting back and putting their feet up would make them wince. This is great for those who want to keep in the workplace, offering the chance to earn more money, keep their brain sharp and their network of friends and colleagues wide.
There are tangible signs that people are taking real control over their later lives. Over half of those who plan to retire at 65 or earlier are doing so because they can afford to, or want to. Less than 25% said it was because they could receive state or occupational benefits at that age. Money will always be important in determining when people retire but it is not the most important determinant for many.
When asked what would encourage people to stay for longer in the workforce, the message was resounding from the top two responses – working part time and working flexible hours. Employers needs to think about this and review their policies. Is the working environment set up so that employees would be comfortable discussing their options with their managers, and would their managers be equipped to have those conversations?
Also scoring highly in the list of things employers could offer to keep staff in the work place were, taking on a less demanding role (30%), updating your skills (22%) and retraining for a new role (20%). For many who may feel they have reached the peak of their current career, or have a reached a level where the work life balance is right for them, there may come a point when they would like options other than being made to fall off the cliff edge and go straight into retirement.
We are seeing this come through in many ways, reflecting both skilled and unskilled routes, meaning there are no barriers for whom this is open to, appreciating the reasons for remaining in work will differ across the population. We are seeing later life entrepreneurs alongside a move to more flexible services people can run from home or locally such as Airbnb lettings or dog walking. Anecdotally I have also seen examples of people taking gap years or further qualifications later in life to recharge their batteries or prepare them for a gear changing move into something new. Later life is a time to try new avenues when perhaps the mortgage is paid off and dependants are no longer living at home.
The big question is what does this all mean for pensions savings when income needs and retirement age become less predictable? That’s a very good question, and one to be addressed in an upcoming blog…stay tuned.