The golden years - pensions freedoms or folly

In my final blog in the series I follow the employee journey through to its conclusion - focussing on the 50 plus age group - or the Golden Years, as David Bowie famously sang about.

It’s weird that I miss Mr Bowie even though I know his legacy of music and film live on. I guess the idea of him not being here in the flesh just makes me sad.

I had a huge collection of The man who fell to earth memorabilia and had aspirational thoughts about holding an exhibition to celebrate the film’s fiftieth anniversary in 2026.

Now I just have a few bits and bobs that have so much less emotional value than they once did.

I guess it taught me a couple of things:

mortality sucks (though I am no fan of eternity - far too costly)
aspirations change through circumstance

Back to the Golden Years, and those employees that fall into the 50+ age group. Firstly, let me stress, being nearly 50 myself, I am not on the way out; I feel as young and as energetic as when I first entered the fulltime workplace at 21.

Considering exit left

Realistically though, I am into the final third of my working life and my thoughts have/are just turning to what “EXIT LEFT” looks like. Interestingly the advent of pensions ‘freedoms’ has started me thinking a little differently about my pot and when and how I am going to use it.

In my previous article, I talked about how people have so few choices in terms of influencing their final outcome. Choose to ‘stay in’ (affordability), choose how much you put in (affordability again) and given the levels of indebtedness or just the cost of day to day living it's scary how little you can actually put aside/ lock away for 30/40+ years.

You think about how much you need to retire on, and then possibly accept much less. Of course you could take more risk (yeah, we all know gambling really isn’t a sensible choice) and drum roll please ... work longer!!

Making the decision when to retire

The latter option is the one that we need to get to grips with fast in the UK. Just because Otto Von Bismarck (to clarify, Bismarck chose 70 as the state retirement age back in the 1880's but it was amended to 65 in 1916) put a line in the sand a century or so ago, doesn't mean we should have any attachment to it in a modern world.

New 'retirement' is not going to be a cliff edge. It will be when you can afford to, when you want to or if you are unable to work. In the US, the level of over 65s still in the workplace is two and a half times that of the UK.

In every Walmart and Starbucks you are met with the face of experience wearing a broad smile because they haven’t been thrown out to pasture while still in their prime.

So what do our current crop of over 50’s think, and what are their priorities according to our Generation why? Survey?

for the first time retirement is the main priority, and 43% are kept awake at night worrying about it
paying off the mortgage is a clear second

Asked how they view retirement:

57% see themselves phasing into retirement (i.e. working part-time)
62% though, see themselves retiring before 65

Nearly 35% across all affluences see this phasing happening with the same employer, which does make me wonder if employers realise what is coming down the line and how will they react as their workforce ages?

I also think there will come a moment when employers may feel short changed when expecting an employee to retire. Having sponsored a generous DC scheme only to find out it has been used to get their kids through uni or on to the housing ladder . . . it may be admirable, but is it really the point?

Damian Stancombe is partner and head of workplace health and wealth at Barnett Waddingham

This piece was supplied by Barnett Waddingham.