Appropriately for the festive season, writes Tony Watts OBE, the media recently has been well and truly stuffed with coverage of the Government’s plans to encourage workers to delay their retirement and/or actually “unretire”.
It’s not a new theme, as plenty of commentators (including, ahem, myself) have seen this coming down the tracks for some time now, as an ageing population leaving many employers short of staff coincides with pension pots failing to deliver a comfortable retirement for many.
Brexit has compounded the labour shortages, as have the long-term health and financial impacts of Covid, while the recent wobbles in the pensions sector following the mini Budget and eyewatering hike in the cost of living is encouraging many older people to review their plans. In journalistic terms, we have a “perfect storm”.
What nobody quite anticipated was the stalling in life expectancy that was always meant to accompany the rise in State Pension Age, currently under review. Or what has been dubbed the “Great Unretirement”. According to government estimates, about 630,000 people have left the UK workforce since 2019, and employment figures are still not back to where they were before the pandemic kicked off in early 2020.
With so many tectonic plates moving at the same time, the question many people in their 50s, 60s and even beyond will now be asking themselves: when can I actually retire?
Enter the “Midlife Review” or, as the Government likes to call it, the “Midlife MOT”. Basically, the MLR should look at all angles of a person’s life in the round as they head towards retirement – health, wealth and work. From there YOU can decide whether or when you can afford to leave, go part time or take on a less onerous role.
This is at the heart of the Government’s plans to keep older people economically active for longer. But what is it, and how might it help YOU decide your future?
Several years ago, I co-authored a book called “The Midlife Review” with Steve Butler of pensions and employee benefits experts Punter Southall Aspire, and we looked at the concept from the angles of both employer and employee. And this is critical, because if there is a disconnect between the two parties over what should be an amicable understanding, then it simply won’t work.
For employers to retain the skills of older people for longer, and for older people to carry on working healthily and happily, both sides need to understand each other’s perspective, give some ground and try to make it work.
So what would the best future for you look like?
If you’re somewhere north of 45, technically, you’re middle aged now. Hopefully that’s a phrase you’re comfortable with. It’s often been regarded as a negative, but why should that be? All the research shows that your best years in terms of life satisfaction, happiness and even creativity may well be ahead of you.
But to make sure you really do make the very most of the years to come, being “your best you” as positive psychologists would call it, you might want to start planning. Now.
That’s why the Mid Life Review can be a timely chance (or series of timely chances) to pause and reflect. An opportunity to inspect your finances, health and career, map out where you want to get to in the future and plan the best route to arrive there.
Ideally, this would be done (at least in part) in collaboration with your employer because they also have a vested interest in helping you achieve your objectives. Enabling you to be “your best you” can also mean them employing your “best you” too: someone in the right role, working to their maximum effect.
An MLR is not like a regular annual work review, exploring how your job has been going for the last 12 months, whether you’re due a raise and so on. It drills down to what your drivers are… personal as well as professional. It should be encouraging you to ask yourself some really important questions.
Like most processes, an MLR will only give you the right answers if you ask the right questions. So, to start the ball rolling, a question for you: where do you see yourself in five, ten, twenty, thirty years’ time?
For instance:
- Do you see yourself as retired… do you want to still be working full time – or would you like to start winding down towards retirement?
- Do you envisage yourself in another role, applying your life and work skills in a different way, perhaps running your own business or volunteering for causes you really care about?
- Would you like to be spending less time at work and more time on personal projects, or long-held ambitions?
- Do you want to see more of your family, for instance play a major role in any grandchildren’s lives?
- Are you concerned to get your health and fitness into better order?
- Do have caring responsibilities that you’re finding hard to combine with work?
- If you’re looking to change career or start your own enterprise, do you have the skills in place to do that?
Now a second question: will you have the funds in place to be living the life you’ve just imagined?
Indeed, do you even know how much you will saved by the time you reach those benchmarks of 10, 20 or 30 years into the distance. Have you, or a financial advisor, ever calculated how much more you might need to save in the interim?
Taking control of your future means taking control of your finances.
Finally, will your health be able to support you in that far-off imagined life… or might you need to make adjustments to your wellbeing and fitness regime to ensure it doesn’t start to cause problems?
It’s not rocket science: the earlier you begin the more chance you have of reaching your 60s, 70s, 80s and beyond in the physical shape to enjoy your later years.
So that’s work, wealth and wellbeing… the three leg stools of most MLRs. The opportunity to look ahead and take control of your life.
It’s important to consider whether this is a short, medium or long-term situation – and to build in the possibility of further conversations should circumstances change. Look on it as a “process” – not a one-off discussion.
In summary: let’s talk wealth, work and wellbeing
From an employee’s perspective, no MLR review can be conducted meaningfully unless that employee has all the information available to help map out their future.
So, from a financial perspective, you need to know, as part of your MLR:
- Whether (or not) you are on track to save enough for a comfortable later life, or retirement at a time of your choosing.
- What changes you need to make to achieve that, if that isn’t the case.
- Whether you could afford to make any changes to your job or hours that would affect your income and future pension.
From a health perspective, ensure that you have:
- Assessed your physical and mental wellbeing.
- Recognised the impact this is having / could have on your work and life.
- Made conscious choices to make any changes you think would be beneficial.
Armed with that, you can now have a conversation with your employer / line manager on whether there are health or personal circumstances – such as caring responsibilities, health issues or financial pressures – that that are making it difficult for you to work in the way you currently are being expected to do.
And if so, what changes might be beneficial – such as to your:
- Hours
- Role
- Responsibilities
- Career prospects
- Training opportunities
- Working environment
There is no fixed template MLR that will suit every employer or employee, but if both sides go into the process looking to achieve a mutually reasonable and positive outcome, then both sides will gain. The alternative is for valuable employees to potentially be lost to the workforce and for those individuals to face financial hardship or continue in untenable situations that could jeopardise their health and wellbeing.
You can read the book from which some of this article has been taken by clicking here: https://www.amazon.co.uk/Midlife-Review-guide-wealth-wellbeing/dp/1781334609
And you can check out whether your financial plans are on track using the RetireEasy LifePlan, available here: https://www.retireeasy.co.uk/
