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What makes your “Second Fifty” different from your parents’?

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This content is for information purposes only and should not be taken as financial advice. Every effort has been made to ensure the information is correct and up-to-date at the time of writing. For personalised and regulated advice regarding your situation, please consult an independent financial adviser here at Castlegate in Grantham, Lincolnshire or other local offices.

We often hear about how today’s adults “have it different” from their parents. In the 1970s, for example, properties were cheaper relative to earnings, university fees did not exist and women typically relied on their husbands for a pension (the latter working predominantly in one career). Today, in 2024, those approaching retirement are rightly asking: “Will my retirement look like what my parents have had?”

Below, our dedicated team in Grantham explores some common financial planning characteristics of those entering their “Second Fifty” in 2024. We explain why many of these traits are different from the prevailing picture of retirement in previous decades, with some thoughts on how to plan accordingly. We hope these insights are helpful to you.

For more information or to discuss your own financial plan with us, please get in touch to arrange a no-obligation financial consultation at our expense:

01476 855 585

A “slow down” towards retirement

In the 1970s and 80s, most people who retired did so “fully” with a “hard stop”. Workers had firm retirement dates in view. After which, their employment ceased entirely and they started living off their pensions. Today, the picture is quite different.

One study by Aegon suggests that just 27% of employed people currently expect to have a “hard stop retirement” like this. Rather, most anticipate working in some form in later life (e.g. continuing with part-time or freelance work).

This is partly due to a societal mindset shift. More people want to “keep their mind sharp” in their Second Fifty or want to continue enjoying the benefits of a work-life balance, such as a team spirit amongst colleagues. However, some people also cite financial concerns about the sustainability of their current retirement as a reason for expecting ongoing work in retirement.

In short, while many people over 50 will still retire in the “traditional way,” the option of “gradual retirement” is likely to become increasingly popular.

Longer retirement

Average life expectancies in the UK are longer than they were in much of the 20th Century. In the mid-1970s, British people could reasonably expect to live to about 72. Today, in 2024, healthy people can hope to reach 81 or older.

In other words, employed people in the UK can reasonably expect their “retired life” to be much longer than their parents or grandparents. Indeed, a quarter of British babies born today are likely to reach 100. This greater longevity is wonderful news, but it also brings challenges.

One challenge is the increased risk of health problems in retirement. Eyesight, joints and other aspects of our physique and minds deteriorate as we age. These bring additional costs to our time, energy and finances (despite our NHS). This shows the importance of planning for social care and related costs when building a robust plan for your Second Fifty.

Another challenge is the additional burden placed on retirement savings. More time spent in retirement likely requires bigger pension “pots” compared to previous generations who did not live as long. You cannot rely wholly on the government to pick up the bill.

Consider that, in 1948 (when the State Pension was introduced), a 65-year-old receiving the State Pension could expect to receive it for another 13 years of life. Today, that timescale has increased to 21 years. This is putting an incredible strain on the public purse.

In summary, many people over 50 will need to make more plans (compared to their parents) to account for greater overall costs in retirement.

Greater generational support

If you are likely to live longer than previous generations, this also implies that you may (hopefully) live to see your grandchildren and even great-grandchildren mature in their years. This would be tremendously enriching.

At the same time, this also potentially means you could be supporting multiple generations during your future retirement. Already, adult children are living at home for longer due to unaffordable rents in many areas. The “Bank of Mum and Dad” is heavily relied on to get onto the property ladder. New parents increasingly rely on elderly relatives to help look after their children due to the crippling costs of British childcare.

Then, there are those with blended families, which can increase the complexities and obligations involved in providing financial support. Overall, it is reasonable to expect that navigating these issues will be even more important for those entering their Second Fifty.

Conclusion & Invitation

This might all sound like bad news. However, it is important to remember the wonderful positives for those looking ahead to retirement. Many of us can hope to live longer, enjoy more flexible working arrangements and pursue the goals which bring fulfilment – such as time with family or global travel.

The issues identified in this article are not insurmountable. Many people can craft a bespoke financial plan which can move them in a positive direction towards a comfortable, rewarding retirement (whatever form that might take).

If you are interested in discussing your own financial plan or retirement strategy with us, please get in touch to arrange a no-commitment financial consultation at our expense:

01476 855 585