The Changing Face of Retirement

Years ago retirement was clearly understood by everyone, and we all meant the same thing; that you stopped work and collected your state pension (formerly called the Old Age Pension). Pension funds were not transferable between employers and schemes, and so the only way to guarantee a good pension was to stay with the same employer for about 40 years.  Women retired at 60 (because they were expected to care for elderly parents, and anyway would probably marry someone a few years older than them). Men would retire at 65 and life expectancy was 70: “Three score years and 10”. Virtually nobody worked beyond retirement, although some might take on some voluntary work. Retirement was definitely a cliff-edge experience, both socially and financially, with most pensions being modest, and most married women being dependent upon their husband’s pension.

More recently there was a swing towards early retirement as the baby boomer generation paid off their mortgages, down-sized and started to take long-haul holidays. Pensions were more generous as the economy boomed; house prices rose steadily and life expectancy had increased. The phenomenon of early retirement was seen by many employers as a problem when teachers and doctors wanted to retire at 50 or 55 in order to ‘enjoy life’, but often returned to the workplace in a consultancy role.  So from the 1990s rules on public sector early retirements started to change.  At the same time there was a move to equalise men’s and women’s retirement ages.

At the present time more and more people expect to work past retirement, either for interest or for financial reasons.  Life expectancy has increased to such an extent that the pensions industry is in crisis.  The state pension age is increasing again, meaning that most people will have to work longer, often for a smaller pension.  Improved health in the population means that individuals are no longer content to do nothing after finishing work.

So what does this mean for the future? With an increased life expectancy comes a greater need to prepare for many more years without a wage and without the structure of a paid job. Few of us can expect to retire on a generous pension from our employer, and the state pension is only just over £100 per week or £5500 per year. So it is really important to start making sensible financial plans at least 10-15 (probably 20) years prior to your anticipated retirement date in order to build up a pension pot that will provide you with the income you’d like to live on.

And do remember that university fees are likely to keep on rising, and that can place an extra burden on parents, often resulting in pressure to keep on working. But planning for retirement is not just about finance: What to do with all that free time? It might be spending more time with the family; indeed many grandparents are often roped into providing free childcare for their grandchildren, especially to help out with the increased childcare costs.

People forget that work is an inherently social activity for many, and so it is important to plan how to fill that gap. When I coach people in planning for their retirement I will ask them what they will miss about working, and the answer is invariably about the people, the team, the friendliness and sense of belonging. So their vague plans of taking the dog for long walks, reading, painting and other solitary pursuits are not going to replace the social interaction that occurs in the workplace.

Whatever a person wants to do in their retirement will probably need some form of plan. It may be to study for a new career or interest. It could be planning to set up a small business, or taking a part-time job.  If the pension payments are not enough to live on then this is a sensible way to supplement the family income, and pay the mortgage if that’s not been dealt with.  However some people don’t think it would be fair to take their pension and then take on a new job, especially when so many young people are seeking work. So some people take on voluntary work such as Citizens Advice, working in a charity shop, providing hospital transport, or helping children to learn to read – all of which are very rewarding.

I have met many people who tell me they are too young to think about planning for their retirement (some of them are in their early 50s!) and they like to just “go with the flow”. And yet when I talk to retired folk they often regret not having taken the steps to save enough to clear the mortgage, or get that extra qualification, or learn a language. Going with the flow means that people may simply drift towards their retirement and then it really does become a cliff-edge!

Even those people who are making plans are not quite sure whether to ease gently towards retirement by dropping a day or so per week and gradually reducing their hours, or to get to that cliff edge and just jump off, working the same hours right up until their final day.  But again, a bit of planning and maybe just talking to the rest of the family will really help to make those decisions.

There have been lots of studies that show that planning for your retirement, and exercising some control over when and how you finish work, will make you happier and healthier when you do retire. So don’t get to retirement feeling anxious or unprepared; take some time now to plan and think about what your retirement will look like, and it will pay dividends in the long run.

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Technology: one size won’t fit all generations

When you’re thinking about sending out information, it’s worthwhile taking a moment to be really clear about who your audience is, and then you can tailor your message to meet their needs. Well that’s not new, and you probably already send out information appropriate to different sectors and industries.  But think also about whether your target audience is older or younger, as members of the different  generations have different preferences in reading, using and sending information. Dr Graeme Codrington has suggested the following groups have their own preferences:

Traditionalists (born before 1945) will generally prefer you to use “the Queen’s English”, with proper sentences and punctuation and definitely not ‘text speak’. They may like plenty of time to consider your offer, and won’t want to be deluged with daily reminders.  And just because many people of this age may already be retired, don’t forget that those still working are probably running the family firm, or in senior positions, and may therefore have considerable influence in their company.

Baby Boomers (born 1945 – 1965) are born optimists and keen to take advantage of  technology (think about the grey surfers) but had no computers around when they were growing up, and therefore may be slow on the uptake when using social media. Boomers invented one-to-one marketing, so your products and communication need to be tailored to their needs – and they have loads of needs: they control over 70% of the net personal wealth in the UK, and if you want them to spend it with you, then you need to make them feel in control, and special.  Regular updates on the progress of your project, and offering the ability to change the spec will be very welcome to the Boomers.

Generation X (born 1965 – 1980s) are now in their 30s and 40s and are the first group to grow up with technology, and enjoy access to computers in school. They are very comfortable communicating using email on their laptops, PDAs and BlackBerrys, but they want the flexibility to work how and where they want, but they suffer from “information overload” and so are more likely to need regular reminders about your services.

Generation Y (1980s- 2000s) are also known as Millenials, and are totally at ease with using technology and social media to enhance their work as well as their social life. In fact employers who try to prevent a Gen Y from accessing Facebook in work time may find themselves having to find a new employee. Short snappy media messages and tweets are more likely to hit home, whereas lengthy detailed information might be ignored.

Not all older people hate technology, and not all younger people are as competent with it as you may think, so it’s always worthwhile getting to know as much as possible about your contacts.  Getting the communications strategy right (what to say, who to say it to, how to deliver the message) when you’re working across generations will pay dividends in the end.

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Technology: one size won’t fit all generations

When you’re thinking about sending out information, it’s worthwhile taking a moment to be really clear about who your audience is, and then you can tailor your message to meet their needs. Well that’s not new, and you probably already send out information appropriate to different sectors and industries.  But think also about whether your target audience is older or younger, as members of the different  generations have different preferences in reading, using and sending information.

Traditionalists (born before 1945) will generally prefer you to use “the Queen’s English”, with proper sentences and punctuation and definitely not ‘text speak’. They may like plenty of time to consider your offer, and won’t want to be deluged with daily reminders.  And just because many people of this age may already be retired, don’t forget that those still working are probably running the family firm, or in senior positions, and may therefore have considerable influence in their company.

Baby Boomers (born 1945 – 1965) are born optimists and keen to take advantage of  technology (think about the grey surfers) but had no computers around when they were growing up, and therefore may be slow on the uptake when using social media. Boomers invented one-to-one marketing, so your products and communication need to be tailored to their needs – and they have loads of needs: they control over 70% of the net personal wealth in the UK, and if you want them to spend it with you, then you need to make them feel in control, and special.  Regular updates on the progress of your project, and offering the ability to change the spec will be very welcome to the Boomers.

Generation X (born 1965 – 1980s) are now in their 30s and 40s and are the first group to grow up with technology, and enjoy access to computers in school. They are very comfortable communicating using email on their laptops, PDAs and BlackBerrys, but they want the flexibility to work how and where they want, but they suffer from “information overload” and so are more likely to need regular reminders about your services.

Generation Y (1980s- 2000s) are also known as Millenials, and are totally at ease with using technology and social media to enhance their work as well as their social life. In fact employers who try to prevent a Gen Y from accessing Facebook in work time may find themselves having to find a new employee. Short snappy media messages and tweets are more likely to hit home, whereas lengthy detailed information might be ignored.

Not all older people hate technology, and not all younger people are as competent with it as you may think, so it’s always worthwhile getting to know as much as possible about your contacts.  Getting the communications strategy right (what to say, who to say it to, how to deliver the message) when you’re working across generations will pay dividends in the end.

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Older Workers: A valuable asset or a costly liability?

In their latest book, Doing the Right Thing; the Importance of Wellbeing in the Workplace, Theo Theobald and Cary Cooper remind us that employers are only just realising that “the accumulated wisdom of many older workers is a valuable asset and something that should be nurtured and farmed.”

However, many employers, here in the UK and across Europe, seem to think that older workers are a problem to be managed rather than a valuable resource to be celebrated. To them,most people over 50 are rigid in their thinking, unable or unwilling to learn new things and blocking the progress of younger employees. As a result, they often stop training their older workers, thereby denying them the opportunity to gain and improve their skills and knowledge.

Although that may have been acceptable in the past when there were plenty of bright young things tumbling out of universities full of ambition and knowledge, times, and the law, have changed.  The abolition of the Default Retirement Age (where you could assume that everyone would retire at 60, 65, or your normal retirement age) has seen some shortsighted employers complaining that they can no longer rid themselves of unproductive older workers through retirement. In that case, why are you employing unproductive workers? Why aren’t you managing their performance properly?  Why aren’t you training them? And why aren’t you using their skills and experience to bring on your younger workers?  

There has been a huge rise in the number of age-related tribunal cases over the past year, and the amount of compensation awarded for age discrimination is currently nearly double that of other employment cases such as sex and race discrimination. Refusing to train older workers and excluding them from promotion opportunities on grounds of age are covered by the new legislation, and employers could find themselves paying out if they are accused of ignoring older workers and leaving them to drift towards retirement.  

If we don’t take action now, a perfect storm will hit us.  We are all living and working longer and with pensions being squeezed, many people can’t afford to retire.  At the same time, employers can no longer force their older workers to retire.  To cap it all, recent research has highlighted that younger managers are struggling to manage their older colleagues well, which leaves older workers demotivated and disconnected from the workplace. Many management courses ignore the need to understand inter-generational differences. Just as what motivates the baby boomers will leave Generations X and Y cold, Millenials have a grasp of new technology that leaves their older co-workers standing. These differences, when properly understood, can be used by savvy employers to get the best out the whole workforce, but it does require thought, understanding and training.

10th December 2011

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