Pension Planning & The Changing Work Life
Social commentator hark back to a supposed golden age when everyone had a job for life.
That is wishful thinking.
There was never such a time.
Companies have always gone bust.
People have always lost their jobs.
Other were forced out of work through accident, illness or social pressure.
It is less than forty years ago that many employers - including the Civil Service - forced women to resign from their jobs when they married.
The point the commentators are trying to make is that work life used to be more predictable.
You generally stayed in one job, or with one employer, longer.
There was not the expectation of a regularly moving job or career, when sudden changes of employer or are now the norm - whether worker like it or not.
Changing jobs can have advantages for retirement planning.
If by moving job you advance more rapidly up the career ladder and boost your earnings, you are in a position to save more for retirement.
But frequent changing does make planning more complicated.
The more different jobs you do, the more bits of pension and savings you may collect along the way.
Keeping track of them and working out how you are doing become a chore.
There may be downsides too.
If you swap jobs too frequently you may find you lose a year or two of pension entitlement when you move.
And each time you change, you may be faced with questions about what to do with pension funds.
Charges for switching money around can eat into what you have saved.
Swapping jobs more frequently is only half the story.
Another fundamental change in the past few years is the rise of self -employment.
Around one in five of the workforce is expected to be self-employed by 2010 - double the number who worked for themselves in the early 1990s.
Frequently, individuals will switch between self-employed and employed and then back again.
Self-employment pose its own challenges to retirement and then back again.
Self-employment poses its own challenges to retirement planning.
It shuts the doors on some kinds of savings and pensions, and opens the doors to others.
If you want to be a less-active pensions investor, look at a lifestyle plan, which most pensions companies now offer.
This type of plan invests in riskier areas, such as shares, when you are younger and have time on your side.
Later, as you approach retirement, the plan automatically moves you down the risk profile.
One way is to switch 20 per cent of your fund into safer bonds starting ten years before you retire.
Then five years before you want to stop work, the fund moves again, bit by bit, into a cash fund.
You can always override a lifestyle plan if you want.
That is wishful thinking.
There was never such a time.
Companies have always gone bust.
People have always lost their jobs.
Other were forced out of work through accident, illness or social pressure.
It is less than forty years ago that many employers - including the Civil Service - forced women to resign from their jobs when they married.
The point the commentators are trying to make is that work life used to be more predictable.
You generally stayed in one job, or with one employer, longer.
There was not the expectation of a regularly moving job or career, when sudden changes of employer or are now the norm - whether worker like it or not.
Changing jobs can have advantages for retirement planning.
If by moving job you advance more rapidly up the career ladder and boost your earnings, you are in a position to save more for retirement.
But frequent changing does make planning more complicated.
The more different jobs you do, the more bits of pension and savings you may collect along the way.
Keeping track of them and working out how you are doing become a chore.
There may be downsides too.
If you swap jobs too frequently you may find you lose a year or two of pension entitlement when you move.
And each time you change, you may be faced with questions about what to do with pension funds.
Charges for switching money around can eat into what you have saved.
Swapping jobs more frequently is only half the story.
Another fundamental change in the past few years is the rise of self -employment.
Around one in five of the workforce is expected to be self-employed by 2010 - double the number who worked for themselves in the early 1990s.
Frequently, individuals will switch between self-employed and employed and then back again.
Self-employment pose its own challenges to retirement and then back again.
Self-employment poses its own challenges to retirement planning.
It shuts the doors on some kinds of savings and pensions, and opens the doors to others.
If you want to be a less-active pensions investor, look at a lifestyle plan, which most pensions companies now offer.
This type of plan invests in riskier areas, such as shares, when you are younger and have time on your side.
Later, as you approach retirement, the plan automatically moves you down the risk profile.
One way is to switch 20 per cent of your fund into safer bonds starting ten years before you retire.
Then five years before you want to stop work, the fund moves again, bit by bit, into a cash fund.
You can always override a lifestyle plan if you want.