While the question of retirement may feel like a distant one, there is never a wrong time to start thinking about what comes next. The longer you defer that conversation, the less time you have to put plans in place – plans that will eventually spell the difference between anxiety about the future and excitement. 

Of course, it’s not necessarily that simple. Fresh financial challenges have caused a big question mark to loom over younger generations, contributing to a general sense of cynicism among younger workers. Our history providing financial advice to Bristol and the surrounding area means that we are very much in-tune with how the ‘money mindset’ changes from one generation to the next – and, specifically, what stands between them and a sense of financial good standing. 

Will a clear-cut, definitive promise of retirement be possible for those who are just now beginning to plan for their retirements? Or will the idea of retirement continue to evolve (largely for the worse) over the next few decades?

What’s causing the concern? 

There are a lot of different factors – some new, some that have been a long time in the making – contributing to the general sense of apathy many under-45s are feeling toward their pension and retirement plans

For starters, pensions are now incredibly scattered across many different pots. Since 2012, businesses have been required to auto-enrol qualifying employees into a workplace pension scheme. On average, between the ages of 35 to 44, Brits will change jobs 2.9 times – just a little higher than the average for those aged between 25 and 34. 

What this means is that a lot of people feel their pensions are scattered across many different (and largely forgotten) places. It’s always possible to gather up those loose strings and consolidate, but the lack of clarity for UK workers will inevitably lead to some degree of uncertainty. In fact, some research suggests that around 25% of Brits don’t know where their pension fund is being invested.

There are also plenty who don’t know what sort of pension they will need in order to live comfortably. According to This is Money, 43% of people believe a total pension pot of £100,000 will be sufficient. In reality, this is far from accurate for most people. 

What’s more, high inflation generally means that pensions – and other investments – are slower to grow. With a series of economic downturns, from the 2008 financial crisis to the impact of Covid-19 on people’s finances and, of course, the most recent cost-of-living crisis, it’s likely that many under-45s are feeling unhopeful when it comes to creating a sizeable pension pot. Instead of a hard stop at retirement, many expect retirement to be a gradual process – a slow reduction of hours and pay until they are finally financially ready to stop work completely. 

Despite the fact that the overwhelming majority of people would like to retire sometime between the ages of 45 and 64, less than 20% believe it’s a possibility. 

Turning the tables

It may sound a little reductive to say, but it remains true that a solid plan is the best way to combat any feelings of anxiety, confusion, or apathy you may feel toward the distant future. It’s not just about answering the big, overarching questions of what you want retirement to be, look like, and offer you, but also about nurturing your own savings and investments – alongside growing a strong workplace pension – over the course of many years. 

If you can maintain a strong and diverse investment portfolio, understand the quantitative and qualitative aspirations you have for the future, and remain capable of adapting to external forces without feeling overwhelmed by them, then control remains with you, even as the economy inevitably dips and rises over the years. 

When we work with clients to answer the big question of retirement, we look at tax efficiency, optimising existing pensions, and devising a plan for savings, investments, and protection that is not just comprehensive but adaptable. Thinking about your pension inevitably means thinking about the years in between and not treating them as two entirely separate concerns. 

It’s understandable that under-45s are beginning to lose hope in the idea of a definitive date for leaving work, a comfortable retirement, and the ability to feel confident in that plan years – or even decades – in advance, but it remains a possibility. The key is beginning early, avoiding the non-approach of burying your head in the sand, and getting proactive about regaining control, even as economic conditions ebb and flow around you.