The biggest cultural shifts happen invisibly, bubbling away below the surface for years before someone notices a change. So it was the acceptability of moustaches and gluten-free diets. And so it is with an understanding that we will be working until we die.
There was once a time when the goal of any aspirational worker with decent earnings potential was early retirement. It was the Holy Grail of just deserts – you’ve worked hard, you’ve earned the right to sit looking at starry skies in a permanently semi-sozzled state on the veranda of a villa in the South of France, where family and friends will come and visit and be impressed and say: ‘What do you do with your time?’ And you will reply: ‘I read and sunbathe and just don’t know where the day goes.’
These days, the goal of any aspirational worker with decent earnings potential is to keep working as long as possible before declining health heralds the inevitable slide towards death. There is no longer an end to the means (the Government has a whole section of its website dedicated to working in retirement). Sure, you meet the odd person who plans to retire early, but even these people have one eye on part-time, voluntary or consultancy roles – or becoming unofficial childcarers for grandchildren.
Aviva, the insurer, has published some research that it says shows the death of early retirement, as official employment figures show there are 9.67 million workers aged 50-plus. This is the biggest number of workers in this age category since records began in 1992 and represents 31 per cent of the entire UK workforce.
The analysis also showed the decline in workers up to 64 who define themselves as ‘retired’. The population of early retirees peaked at 1.6 million in 2011 and has steadily fallen since then to 1.2 million now. Aviva reckons that no one below the age of 64 will be retired by 2029.
Retirement ages are shifting up. The millennial generation tend to be the most pessimistic about retirement prospects (they don’t have any and prefer not to think about it, thank you).
Why have we become so pragmatic about our Autumn years? Whatever happened to good, old-fashioned gardening and the odd Caribbean cruise? Is it simply that we are living longer and healthier lives and therefore CAN work longer? Or do we just LOVE our jobs so much?
If only it was that simple. The obvious reason to work longer is financial necessity, which can arise for a number of reasons. One biggie is housing debt. The over-50s are often approaching the end of interest-only mortgages they will not be able to pay off using their savings. Many are extending the terms of their loans, or taking out additional borrowing. They need to fund this somehow and their pension income may not be enough.
Another is the pension gap. The average British worker retires with a pension pot worth around £40,000. This generates an income of less than £6,000 a year – much lower than the £24,000 odd that people think they need. Why such a shortfall?
People not paying enough into pensions, people not paying anything into pensions and badly performing pension schemes have all had a part to play in the creation of this ‘gap’. The FTSE has done pretty badly in the last two years too, so someone retiring now may find their pot falling disappointingly short of what they were hoping for.
Another is the need to help children and grandchildren – who are themselves saddled with different types of burdens, such as high housing costs and student debt. But there’s a macro-economic necessity, too. The UK can’t afford for people to retire, full stop, never mind early. The country has a huge deficit, and a top heavy society where most older people are taking rather than giving is not going to help.
Alistair McQueen, savings and retirement manager at Aviva said: ‘When it comes to funding our longer lives in retirement, we have two options – save more or work longer. For many, the best response will be a mix of the two.’
If you have time on your side and would like to read a few books before you die, then a focus on the former option would be sensible. Perhaps by the time you hit the big 6-0, everyone who is anyone will be taking early retirement again. Alternatively, find a job that you really love. At least then, when you find yourself still tapping away at a laptop at 80, you won’t be too miffed about it.
Rebecca O’Connor is the founder of Good With Money and a former financial writer at The Times