I came across a comment in the Sunday papers this week that made my jaw slacken a little: “The liability of final salary retirement schemes for NHS staff, police, teachers and other state workers rose by £190 billion to £1.5 trillion in the 12 months to March last year, according to official data”. Yikes!.
When you consider that statement above, you come to an inescapable conclusion: we just cannot afford to retire in the way many of us had expected to. And certainly not when you apply the dwindling money available to the increase in years it might have to be spread across.
On the pages of this blog, I lightheartedly discuss my dilemma, “Retire early or work: work or retire early?”, and usually comment about what a nice problem it is to have. But increasingly I feel that my generation might be one of the first and last to face it because, as a society, there’s no way we can fund forty years of retirement. It’s just impossible. It might actually be impossible for me too, a thought that often undermines my own contentment and nudges me toward thinking that, really, earning a bit more money while I still can might not be too bad an idea.
To an extent, we already know we have a big pensions problem – the state pension age is stretching out further and further while the collapse of BHS and Tata steel are seen to be exacerbated by horrendous pension deficits. This makes me chew my nails over the stability of my own private Defined Benefit pension scheme while my wife, who worked for a time in the NHS, wonders if she’ll be allowed to pick up her NHS pension at 60? I personally know policemen, firemen and doctors who are keeping rather quiet about the fantastic public sector deals they have that will see them quit their jobs “fully vested” on the pension front at fifty five. I think they’re almost scared to mention it in case someone in Government realises the magnitude of the problems we face, and whips it out from under them. Now, I’m not about to enter the pensions debate on either side about the private versus the public sector, partly because through my public sector Darling Other Half, I’ll hopefully benefit from both. I’ll state that for the moment I seem to be one of the lucky ones, and leave it at that.
In this blog, the financial underpinning of my early retirement is a given, and I’m very conscious of it even if I choose not to expose the detail of it in public. The choices that I have were enabled by the personal workaholic and tight-wad decades that came before retirement, where I worked and saved, worked and saved and worked and saved, until I’d had enough of that lifestyle. Plenty of bloggers are focused on those aspects of working and saving and funding early retirement, so I tend to focus on the non-financial ups and downs of this kind of life, where fifty years of playing golf suddenly doesn’t seem to be the perfect existence I once imagined it might be (and certainly not when the first ten of them are playing golf either on your own or with the “real” pensioners of the generation ahead of me.)
So I often muse about the working life with the undercurrent sentiment being that I think I need to go back to work, despite the fact that, financially, I don’t really “need” to. Frankly, I feel I’m too young to retire in my fifties. I know I’m not alone in this. The aforementioned policemen, firemen and doctors of my acquaintance are thinking the same way – what other jobs can they land once they crystalise their pension? A bit of consultancy three days a week, maybe? A bit of private practice at the hours of their choosing? A bit of standby employment when needed? And a general annoyance that, with “everyone” thinking the same way (whilst ageist employers are generally not) those options may be more limited than they could be.
The fact is, the old model of how we saw life panning out – education, work, retirement – is a busted flush. It’s just not fit for purpose any more. I’ve recently read that the young already know this and are carving out different options for themselves between the ages of 18 and 30 which, like the advent of the “teenager” in the fifties, is becoming a distinct life stage. Well, I’m thinking that I’m at the other end of it, trying to carve out options for a life in the years between 55 and 70. I’m just not ready for full time retirement, but neither do I want to return to the working life I had – the sixty plus hour working week, the time away from home, the politics of career building, the status anxiety of earning a crust. The options that the 18-30s are adopting are probably the ones I’m going to have to look at: self-employment, learning new skills, taking interim roles, part-time work, six month contracts, maintaining networks and asking for roles that might not yet have become conventional ways of working. Flexibility on what you do, how you do it (and what you might be paid for it) will be key.
This trend might be increasingly self-evident, but it strikes me that I’m choosing to seek this option out. Millions won’t have that choice – quite simply they will NEED to find work between the ages of 55 and 70. I think that many of the roles that might be available for the 55 to 70 year olds are going to be those sought out by the 18 to 30 year olds, and it’s going to be “interesting” to see which age groups settle into which roles and how our society is going to have to change to accommodate it.