New workers face a significantly longer working life than past generations

The typical Briton entering the workforce today can expect to have nine jobs, including one major career change, across 48 years of working[1].

 

The research from LV= marks a sharp shift from past generations, with today’s younger workers set to have twice as many jobs as their grandparents, with the ‘job for life’ becoming virtually extinct[2].

Today’s new workers also face a significantly longer working life, retiring seven years later than their grandparents did (66 vs. 59)[3], with nearly a quarter (23%) working well into their 70s. More than half (55%) can also expect to be made redundant at least once across their 48 working years (18-66).

Work life balance

Recent real wage falls[4] also means that the new worker can expect a lower full-time starting salary (in real terms) than their parents started on (£14K vs. £17k)[5], and despite the working-from-home rate doubling over the last 30 years[6], we’re less happy with our work life balance today than our grandparents were (68% vs. 72%).

While this paints a gloomy picture for young people entering the workforce today, they face a healthier job market overall, with unemployment levels at a record low[7]. They also enjoy shorter commutes than their parents did, as well as a far greater annual leave entitlement[8].

Numerous pension pots

Many people may decide to move jobs due to a desire to increase their salary or advance their career. However, the research highlighted that shorter stints at numerous jobs could result in millions being lost in pension savings, as some may lose track of savings spread across a number of workplace schemes. In addition to this, having numerous pension pots, for some people could also lead to confusion over fund sizes, with 40% of those with one or more pensions products unsure of the total value of their pension reserves.

The research also shows 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.

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.

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.

Source data:

[1]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).

[2]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.

[3]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.

[4]ONS Labour market data (August 2014) shows record-low real wages, driven down by healthy employment levels.

[5]Average starting wage of current workers (aged 50-64) was £3,000, equivalent in real terms to approximately £17K today.

[6]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%.

[7]ONS Working and Workless Households, October 2014. Workless households are at current record lows (records began in 1996).

[8]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.