The changing retirement landscape

The changing retirement landscape
  • Financial wellbeing
  • 2 minute read

Following the seismic changes 2020 brought to the world of work, 2021 did not see a return to business as usual. The “great resignation” hit employers around the world, as staff opted to leave their jobs in search of better prospects, greater flexibility, more time with their families – or an early exit from the workplace into retirement.

In contrast, the pandemic has seen many people of working age having to put their retirement plans on ice for a few years, or in some cases indefinitely.

All things being unequal

Research by Legal & General which tracked the impact of Covid-19 on retirement identified a growing trend towards ‘retirement inequality’ in the UK. The study found that 1.3 million people planned to start their retirement early as a result of the pandemic, while 1.45 million were expecting to delay it for up to three years and 2.6 million expected to have to continue working indefinitely.

But the trend towards fortunate – or foresighted – individuals being able to choose a life of leisure at a younger age pre-dates the pandemic. The FIRE (Financial Independence, Retire Early) movement was making headlines as early as 2010, when Jacob Lund Fisker’s book Early Retirement Extreme encouraged millennials to adopt a frugal lifestyle, save intensively, work relentlessly and invest as much as possible with a view to waving the workplace goodbye in their 50s or even earlier.

Retirement in name only?

For today’s retirees, though – whether they are in their 70s or 40s – life looks rather different from the baby-boomer stereotype of days on the golf course, foreign cruise holidays and helping out with the grandchildren. abrdn’s Class of 2022 Retirement Report, which surveyed 2,000 UK adults planning to retire in 2022, found that 66% of them planned to continue to work in some capacity, while 20% expressed worry about their income lasting through retirement.

And that concern is not unjustified – after all, we are living longer than ever before, and costs of care in old age are spiralling. Pension funds and other defined-benefit schemes have coined the phrase ‘longevity risk’ to describe the chance that life expectancies and actual survival rates exceed expectations or pricing assumptions, while those leisure-hungry FIRE devotees have had to factor in a retirement lasting 50 years or more.

With so many variables at play, it is more important than ever that people at all stages of their career have a good understanding of their income needs in retirement, and a plan in place to prepare for it. Whether their goal is claiming a healthy pension in their late 60s, saving aggressively for an extra-early end to their working life, or remaining in the workplace post-pension age, expert financial education will help them to achieve it.


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