Expert view: Life events don't have to derail pensions adequacy - here's how
Traditional, linear career paths – where individuals remain with a single employer for decades – are becoming a thing of the past. Instead, more people are experiencing varied and nonlinear careers, moving between roles, industries, or opting for periods away from the workforce altogether.
Alongside these shifts in career patterns, the pressures associated with health issues and caring responsibilities are on the rise. Many individuals now find themselves needing to take time out of work to address their own health needs or to provide care for family members.
These breaks, once considered exceptions, are becoming far more common.
Moreover, younger generations are facing financial circumstances that differ significantly from those experienced by their parents. The financial landscape they must navigate is marked by different challenges and uncertainties, requiring a fresh approach to pension planning and support.
As we look to the future of retirement, improving pension adequacy isn’t just a challenge, it’s a real opportunity to rethink how the pensions industry and employers support people.
By recognising the reality of career breaks, variable earnings and periods of ill-health, we can design a system that works for modern working lives. It was the key theme explored in REBA’s roundtable report: Impact of ill-health and career breaks on pension adequacy.
The report details how building employee understanding about how taking breaks from saving can affect long-term outcomes and can empower individuals to make informed decisions with confidence, not fear.
Innovative data modelling tools can offer clear insights into how different life choices might influence retirement prospects, enabling people to plan proactively and feel secure about their future.
Personalisation is equally vital. Every career journey is unique, and the reasons behind stepping away from work are as diverse as the workforce itself. Whether someone is managing a health condition or taking time out to care for a loved one, support must be tailored accordingly.
Targeted communications and proactive outreach during absences keep employees engaged and connected, both to their careers and their retirement goals.
Meaningful progress on pension adequacy depends on collective action.
It cannot be achieved in isolation; it requires collaboration across the pensions industry, employers and employees. With earlier support, clearer communications and practical tools that help people better understand, individuals can make decisions that keep them on track for the long term.
Collectively, we can help ensure that everyone has the opportunity to build a secure retirement.
Supplied by REBA Associate Member, Aviva
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