In Scotland as throughout Europe, most workers now face a significantly longer life in employment than their parents or grandparents. Across 48 years of working a typical individual entering the workforce today might expect to have nine full or part time jobs – and on average at least one major career change! Research from LV= shows a sharp shift from past generations, with statistics suggesting many people have twice as many jobs as their grandparents. The concept of a ‘job for life’ is now becoming virtually extinct.
ad+ has taken note of these changes, which are important to employers throughout Glasgow and Lanarkshire. The increase in frequency of a career change forces many people to set up their own business as a viable alternative to seeking yet another job – and as accountants we often help to prepare a business plan for a start-up company in order to apply for and secure funding. The financial pressures created by the state of the economy in recent years has also hit profit margins of businesses in most sectors – including retail, business services and construction. At ad+ we frequently help business owners to review their business model to adapt to these changes.
Work / Life Balance
The decline in real wages during recent times also means that people should expect a lower full-time starting salary (in real terms) than their parents (£14K vs. £17k) and despite the number of people working from home doubling over the last 3 decades, we claim to be less happy with our work / life balance today than our grandparents were (68% vs. 72%).
Whilst this may paint a very gloomy picture for young people entering the world of employment today, the job market is seen as being healthier overall, with unemployment levels at a record low. Commuting distances are much shorter than they used to be, with annual leave entitlement increased steadily over time.
Individuals With Numerous Pension Pots
Moving jobs more often can be put down to a desire to increase salary or further career prospects in a competitive employment market like Scotland’s. However, the research by LV= warns that shorter stints at numerous jobs can result in millions being lost in pension savings overall. Many people simply lose track of their savings because they are spread across a number of workplace schemes. For some, having numerous pension pots could also lead to confusion over their total fund size – some 40% of those with one or more pensions products were unsure of the total value of their pension reserves.
The research also suggests that spending shorter periods in each job could also prompt workers to opt out of auto enrolment if they consider the role to be a stop-gap rather than a significant career move.
If you would like to arrange a meeting to discuss this matter, or would simply like more information, please get in touch with us today:
Phone: 0141 643 9200
Workers entering the job market today can expect to move roles every five years, take one career change and will work for a total of 48 years (average 18-66).
The ‘new worker’ can expect to have nine jobs in their lifetime (9.1). Their grandparents (retired workers today) had nearly half this number (five jobs) across their working lives. Projections estimate just 1.5% of new workers will have just one job across their working lives.
Average retirement age for today’s retired is 59. Today’s new workers expect to work until 66 on average. 23% will work until they are 70+ or never retire.
ONS Labour market data (August 2014) shows record-low real wages, driven down by healthy employment levels.
Average starting wage of current workers (aged 50-64) was £3,000, equivalent in real terms to approximately £17K today.
Working-from-home rate inferred from workers with zero commute. Rate amongst current workers = 6.7% compared to retirees (when they were working) at 2.7%. Those saying they are satisfied with their work/life balance = 68% compared to retirees (when working) of 72%.
ONS Working and Workless Households, October 2014. Workless households are at current record lows (records began in 1996).
Average commute of new worker = 31.6m vs 34.3m for their parents’ generation. Annual leave entitlement has increased twice over the last decade, rising from 20 days to 24 days (for full-time workers) in 2007 and again in 2009 to 28 days.
Pension and investment advice will be given by our sister company, ad+ Financial, which is regulated by the FCA.
INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION AND REGULATIONS. ANY LEVELS AND BASES OF, AND RELIEFS FROM, TAXATION ARE SUBJECT TO CHANGE. PAST PERFORMANCE IS NOT A RELIABLE INDICATOR OF FUTURE PERFORMANCE. A PENSION IS A LONG-TERM INVESTMENT. THE FUND VALUE MAY FLUCTUATE AND CAN GO DOWN. YOUR EVENTUAL INCOME MAY DEPEND UPON THE SIZE OF THE FUND AT RETIREMENT, FUTURE INTEREST RATES AND TAX LEGISLATION. THE VALUE OF INVESTMENTS AND INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED.
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