The Investor 94

what can we realistically afford?

Ian Price, Divisional Director

Retirement Proposition at St. James’s

Place, says:‘Many people like the idea

of working but not full-time, so the

cliff face is being replaced by a glide

path.This brings tricky decisions such

as whether to pay off the mortgage or

help the children get on the property

ladder, and when to start taking pensions.

Financial advice on retirement planning

is essential.’

Former CBI Director General John

Cridland’s independent review of the

State Pension age looked at how we

move away from full-time work.This

government-sponsored review,

Smoothing

theTransition

, published in March, stated

that additional flexibility at work is key to

keeping people active for longer in the

labour force. But it bemoaned the lack of

structured advice, stating: ‘We have

noticed that there is often no natural

trigger point… which may mean

people consider their needs too late.’

The study’s answer is that, alongside

positive reasons for phased retirement

there are also negative ‘push’ factors: a

less respectful attitude towards seniority

means it may be less comfortable

nowadays to work until 65.

So whereas previous generations had

too little choice about how or when to

retire, we now find ourselves beset by a

host of consequential decisions. Do we

‘downshift’, taking on less responsibility,

or do we stay in post but simply go

part-time?When is the best time to take

our pension and do we take it all, or just

part of it? Do we dip into our ISA savings

first? Do we go self-employed? And,

what sort of lifestyle do we want and

mid-life health checks, the government

should instigate a mid-life MOT for each

one of us.This would help us to tackle

fundamental questions about how we

want to shape the remainder of our

lives – what does my partner want to

do, do I want a different job and when

can I take my pension?

Organisations such as Age UK and

Aviva are trialling mid-life career reviews

with employees and the Cridland review

recommends that these be incorporated

into mainstream HR practice.

Paradoxically, the shift to phased

retirement is taking place at a time when

longer life expectancy means larger

retirement pots are required.And for

all the talk of grey gappers returning

for ‘encore careers’, it’s important to

remember that financial necessity will

drive many decisions. For the generation

now contemplating retirement, the trick

will be to make the new‘fewer-hours-

but-more-years’ approach to work meet

both its financial needs and its wider

hopes of personal fulfilment.

Kurt Stallaert/Gallery Stock. Sources: 1 aegon.com, May 2016; 2 iv.com, February 2016; 3 gov.uk, March 2015; 4 ons.gov.uk, July

2016; 5, 6 gov.uk, March 2017

The cliff edge is being

replaced by a glide

path…bringingwith

it tricky decisions

THE INVESTOR