Approaching retirement - a new beginning

Shirley: Hello, I’m Shirley Ballas, and welcome to Rewirement, the retirement podcast from Legal and General. In this six-part series I will be exploring what it means to retire in today’s world. The golden years retirement of old has given way to the new colourful retirement, an opportunity to reset, reinvent and rewire.

From how you can make the most of it and have the lifestyle you dream of, adapt to change on your own or with a partner, or even how you might continue doing the work you love at a pace that suits, we’ve got you covered. Thanks to my expert guests, I will be gathering suggestions to take away the worry and make sure you feel confident, comfortable and in control of your finances after you’ve quit the day job.

Across the next few episodes, we will be shaking off our taboos and getting personal as we meet colourful Rewirees and would be Rewirees, to talk about the issues, questions and concerns that everyone faces.

Female: I would like to retire and do all those things that I want to do.

Shirley: I think it’s so important for people to open up and talk about money, as well as getting our young people to take an interest in their pensions, whatever they can set aside, because it comes around in a flash. And, with a little bit of planning life after sixty can be the most colourful.

Female: You’ve just got to grab hold of it with both hands and get on.

Shirley: So, if you lend me your ear for a little while, I will do my very best to help you with planning for your future, so you can look forward to the retirement of your dreams.

Before we start talking about the ins and outs of enjoying your retirement, we’re going to look at how the way you plan to spend your time is as important as your pension pot in making decisions about when and how you would like to transition to retirement.

Later on, I will be joined by Chris Knight from Legal and General, as well as Dr Alison Smith from the Royal Voluntary Service for their advice and ideas on planning your new beginning. 

But, before we do that, I want to introduce you to some of the stars of our show. I got together with two groups of brilliantly chatty, talented and very inspiring people, to talk about where they’re at in their retirement journey.

First up, meet Tracey, Colin and John. 

Tracey: I’m Tracey, I live in Hove, originally from Wales I’ve been down in Brighton and Hove for 30 years. I am a teacher, well, I was a teacher, now I work for West Sussex County Council in the education department. I have got two children who are 12 and 15, and I live with my partner, Simon.

Colin: My name’s Colin, I’m from Worthing.  I’m a self-employed IT consultant, probably six/seven years away from retiring. I’ve got two grown up children, both of whom are now independent and in jobs, well, my daughter was, she just had a grandchild 11 months ago, our first grandchild. Yes, I’m Sussex born and bred, virtually lived in Sussex all of my life, apart from about two years living in London in my early career.

John: I'’m John, I have been retired about three years, I worked in the Lloyds Insurance Market in London. I am married with two grown up children.

Shirley: I started by asking my new friends how they felt about approaching retirement. Colin was first to share his thoughts.

Colin: I’m not really prepared for it. I’m pretty excited about it if we can live a decent retirement, you know, be healthy, have enough money to do the things we would like to do. It’s a new opportunity, I would see that, you know, I would do quite a bit of volunteering. We’ve got a ninth share in, what’s called, a syndicate boat already and that moves around the country every couple of years, moves to a different base.  So, we get four or five weeks on it a year if we wanted it, and the plan, ultimately, is to sell our shares.  And, money permitting, or around about the retirement or semi-retirement to maybe buy a boat, cruise the network during the decent weather for three or four years, do as much of it as we can.

Shirley: John is already enjoying his retirement, I asked him if the move was what he had expected.

John: Well, that’s a very interesting question, Shirley, because I wasn’t quite sure how I would react to retirement. Some people I know have found it very difficult, they felt that they’re no longer of use to society because they’re not working. I have to admit I didn’t find that at all, I was starting to find, as I approached retirement, that I wasn’t quite as enthusiastic about what I was doing anymore, I was getting to sixty odd, and I was very pleased to retire in the end.  And, I haven't felt worthless, at all, I’ve been very happy.

Shirley: Alright, we asked the same question to Tracey.

Tracey: Well, I’m looking forward to my retirement.  But, I’ve got to tell you, Shirley, I’m only turning 50 next year so it’s still feeling as though it is quite a long way off.  I think it’s exciting to be retired, one of the things about my life, I have a lovely life at the moment but I feel as though I’m living in time poverty, I haven't got much time to do the things that I want to do.  And, I feel like I would like to retire and do all of those things that I want to do, you know, so things that perhaps don’t cost that much money, either.

But, one of the things I am very unsure about is when I can retire. Because, my background is teaching, I’ve got a teacher’s pension. I ducked out of teaching for a little while and I worked for a different company doing training, so I’ve got a little pension pot with them.  It’s all over the place, Shirley, I don’t know when I’ll be able to retire.  But, I feel like know, listening to my colleagues here this evening, I’ve got a chance to put things in place and that’s what I’ll need to do. 

My ideal would be to retire early sixties and just enjoy my time when I, hopefully, am very fit, you know, still got my energy to do the things that I want to do. One of the main things that I’d like to do is to travel around the coast of Wales in a campervan.

Shirley: I love that idea.

Our second group featured David and Marcus, who both spend their free time at a London based choir.

David: So, I’m David, I am 60 in a few months’ time, I am already retired and have been for over five years, and I’ve spent quite a lot of time over the past five years trying to get to grips with pension related issues.  We don’t have any children, we have a couple of cats who, as far as I know, are blissfully unaware of pension issues.

Marcus: My name is Marcus, I just turned 50 last month, so I’m still recovering from that shock. I’m still very much in my working career, I think I probably have another ten to 15 years work left. I’m an Australian, as you can probably hear from my voice, settled here about 15 years ago and, in due course, became a dual citizen.  My wife is Croatian, she arrived here at the same time I did, 15 years ago. We have three children, I have a stepdaughter who is 28 years old, and I have twin boys aged 21.

Shirley: David took early retirement after a career in financial services.

David: Although we have not, since I retired, travelled as much as I anticipated, that was, obviously, very much part of the agenda.  But, you know, just the glory of being able to go and watch a film at lunchtimes on a Monday, you know, and things like that. And, obviously, singing, which is something that both of us do, is very much, you know, enhanced, I’ve joined a second choir.  And so, I’ve been able to do all these things, life is easily filled I’ve found, and I know everybody says it but it really is true, how on earth I ever found the time to get into the office for seven and work until six in the evening, I have no idea.

Shirley: Marcus runs his own business with two other partners, I asked him if retirement was in his sights at 50.

Marcus: I see retirement as a gradual process a, kind of, a tapering off, rather than an end. I’m fortunate that I’m in the kind of business where my work is project work, basically, it’s consulting assignments. I think, as I approach retirement, I will just get increasingly picky about what I take on. So, it’s perfectly possible to slip into a role where you’re doing, I don’t know, 40 or 50 days of work a year on a project you think interesting and worthwhile, get a little top up income, keep the grey cells ticking over, as it were. So, I don’t see retirement as being any kind of a sudden end, more a, sort of, a gradual progression.

Shirley: David’s retirement wasn’t the gentle progression he might have preferred.  He told me about his experience and the realities of cutting down on hours.

David: It wasn’t gentle, I mean, I was ill, so I was forced to stop work.  So, the only thing that was gentle about is that, because they hadn’t found a replacement I ended up working an extra month on a half-day basis, so that was actually quite nice. But, no, it was a fairly enormous gap from a full on, very busy job to, you know, not working at all.

Well, I think a lot of people, and I’ve spoken to friends who are saying, you know, I quite like doing my job, and I enjoyed doing what I did, so that wasn’t an issue. Finding ways of doing, as Marcus has talked about, on a, sort of, pickier basis, but that’s simply not practical for most employment situations. And, I know of people who go onto three-day week arrangements who quite often end up packing, sort of, five days of work into a shorter period. Or, things that are actually important, them not really being involve din when they’re out of the office and, therefore, feeling a little bit, sort of, out of the loop on a lot of issues.

So, it’s tricky to try and achieve that, and I think in a lot of cases people end up stopping suddenly and, I mean, I might have stopped in another year. But, I think if you’re stable in a job and quite enjoying what you’re doing, it’s quite hard to choose a point and say, right, you know, this is the right time to go. And, most people that I know who have recently retired, you know, there’s been some specific trigger.

Shirley: From a busy job to hours of extra time on your hands, David explained how he kept up the pace at the start of his retirement.

David: I pretty much went into projects straight away, the first of which was to repaint the house from top to bottom. I wrote a book, so that took up a fair amount of time. I would say, now, five years on, that I’ve, kind of, reached the end of that, you know, sort of, ideas I had in my head.  So, I’m actually now considering other new things, and particularly getting maybe involved in the mentoring world, or something like that as a chance to Gove something back. You know, I’ve had quite a lot of me time in the past five years but would like to do something a bit more constructive.

You know, and I would say the singing aspect, which is what unites us here, was very important because, actually, that was the one thing that was, aside from having language students in our house, was the one thing that was a continuity from before to after. That Monday nights was rehearsal night the week before I stopped work and the week after, that was really helpful to have that because I think for some it can be tricky to find new things to do.  And, I’ve met a friend recently who lives on his own, and he’s clearly struggle more than I have in terms of finding useful things to do with his life.

I think it’s partly when you’ve earnt reasonably well out of doing things that is not of great value to mankind, you know, there are a lot of things that don’t work that well in society and would be a worthwhile thing to do.  No, it’s more than worthwhile, I think a necessary thing to try and give people some benefit of experience or to do just do something practical that is of benefit to others. So, proof is in actually going out and doing it.

Shirley: Thanks to our fantastic guests for getting together and sharing their stories and perspectives, we’ll be getting to know them a lot better over the next few episodes and meeting a few new friends too.

To talk in depth about the questions that came out of our chat, I’m joined now by Chris Knight, the CEO of Legal and General Retail Retirement and Dr Alison Smith, the Head of Research and Insight Royal Voluntary Service. Thank you both for joining me.

Alison: Hi, Shirley.

Chris: Hello.

Shirley: Chris, how has retirement changed?

Chris: Well, Shirley, look, people used to, kind of, think of their lives in three blocks, if you like.  The first one was, you know, being at school, the second one was working full time, full pelt, if you like, for perhaps one or two employers. And then, there was a moment, a magic moment when you, kind of, got a carriage clock, you shook hands with your employer and then you were retired and that was, kind of it. You perhaps had a pension, or two pensions, you had the government pension and your employer pension, you perhaps felt quite well looked after, you know, owned your own home which was fully paid for. That’s, kind of, the ideal model, it wasn’t always, actually, the reality, but that’s a very strong model that’s in people’s minds.

But, I think, people’s lives these days are much, much more complicated than that. People’s ambitions have changed, they want and expect much more fulfilling lives, they’ve got aspirations and hopes and dreams in retirement, just like they have at any other moment in their lives. But, it is much more complicated, and they have to find their own path.

Shirley: Wow, that is complicated, that sounds complicated, Chris. What are some of the challenges facing today’s retirees?

Chris: Well, Shirley, there are lots of challenges, some of them, kind of, good challenges to have and some of them are more tough challenges to have. So, people are living longer, I mean, that’s obviously great, but it does mean they have to make their money stretch further. They have more complex lives, different family situations.  So, we’ve seen an increase in the divorce rate amongst older people, for some retirees they still have maybe their own children living at home, and they’ve got the responsibility of looking after their own, even older parents.  And, they feel under pressure from generational pressures, but also from their own health and their own care costs.

People might have a whole number of different pension arrangements from different employers during their careers. They might have more housing wealth than they actually do, sort of, liquid savings. Some older people are still paying off a mortgage. People have pension freedoms, which sounds great but, obviously, with freedom that brings that responsibility of choice, some people love that, and other people find that a bit daunting.  But, most people, sort of, naturally look to a company like Legal & General to help them get through this.

Shirley: What do you mean when you talk about helping people have more colourful retirement?

Chris: Well, look, the imagery around retirement can be quite bland and colourless sometimes. People talk about grey pounds or silver surfers, and you often see retired couples pictured as, sort of, walking hand in hand towards the setting sun. But, at Legal and General we are much more positive, and we want to be positive and ambition for people, for our customers and for society as a whole.  And, though, while retiring can be a challenge, there is also huge hopes and dreams for people, and they can really make a huge contribution and get a lot of pleasure out of life.  

So, it’s not all doom and gloom, and we want to put our products in the context of people’s real lives. Everyone is unique and everyone has their own unique colour scheme in retirement.

Shirley: Alison, what are the benefits of volunteering in retirement?

Alison: Chris has mentioned that, sort of, the old notion of retirement and that sense you put up your feet is actually not supported by latter generations of people entering retirement. But also, what the research evidence tells us, staying connected and having social connections, whether you do that through volunteering or you do that through the social groups that you naturally participate in, has a lot of health and wellbeing benefits. And there is, actually, some significant and hard science behind this, and that’s why staying connected and volunteering are so important.

So, we know through an extensive body and growing body of research literature that staying socially connected is, actually, physically important.  We know that social connections are really important for cognitive stimulation, so it’s not only important for staying, sort of, physically active and getting out and about, but also, sort of, mental stimulation.  And also, humans are social beings, so actually exposure to others is almost built up in our DNA, we need others to really stay strong, both physically, cognitively, but also for our immune system.

And, of course, I would speak about the benefits of volunteering, working for the Royal Voluntary Service.  But, you know, it’s not only beneficial to yourself, as far as health benefits, but also really beneficial to others. 

Shirley: Is keeping fit and healthy important?

Alison: I am glad you mentioned that, Shirley, because things like physical activity, incredibly important through the life course, but particularly important in later life.  And, I think when you’re approaching retirement, or you’re in retirement, it’s important to, kind of, visualise what you want to do. Maybe you’ve put off all of those things that you wanted to but were too busy with family life and work to pursue.  And now, you have an opportunity in, say, the next phase of your life, that could be 20, 30, sometimes 40 years, to really explore those activities or those interests that you never had time to explore before.

Chris: Have a dance.  My wife’s a dance teacher, and she’s got students of all ages that are having a fantastic time keeping fit and keeping healthy. People tend to take a very planned and structured approach to their, kind of, careers and work lives and we’d like them to do a bit of the same when it comes to, sort of, approach planning for their retired lives. In particular, the first step, really, to take control of your finances.  You can do it, you know, people then have the confidence to live life to the full.

Keeping close to your social contacts and the networks is really, really important too, and that’s why we’re so keen to support the Royal Voluntary Service and to help people to get out there and volunteer. Everyone has a contribution to make and we’re all in this together, so reaching out to people, organisations you trust for support is really important and you’re not alone.

Shirley: How important is the emotional side do you think?

Chris: Oh, it’s really important, Shirley. You know, money is important, but most retirees tell us in our research that there are three other things that are equally as important.  First one is, living in a home that’s right for you and where you feel safe. People who are able to say throughout their retired lives at home are healthier and happier and feel less of a burden on the NHS and others. Secondly, it’s been talked about, staying healthy and having access to the care you need, when you need that care. And, thirdly, and most importantly maybe, staying connected to friends and family and feeling that you’re making a contribution.

Shirley: But, how can people ensure they enjoy themselves as they get a little bit older?

Alison: Just to say, I mean, ageing, while ageing is inevitable, how we age is not. And, I think the perception around and the notions around ageing is very much around a trajectory of decline. And, I think what people don’t realise is that we have an incredible amount of control over how we age. Much of what we attribute down to ageing, such as disease, is actually preventable through some lifestyle choices, whether that’s being more physically active or enjoying such activities as volunteering or things you’re really passionate about that give you a sense of purpose. 

So, you know, it’s never too late to make improvements that impact on your health and wellbeing.  Retirement in later life is very different than previous generations, and there is so much more out there to enjoy and explore.

Shirley: Chris, both Colin and Tracey talked about plans to use their house to help fund their retirement, how can people do this?

Chris: Well, Shirley, there are a few ways they can do that.  One thing might be to sell the house and move into rented accommodation. Alternatively, people can downsize to a smaller house, or a purpose-built accommodation perhaps in their area. Or, you could release some of the equity in your house to free up funds.  So, a lifetime mortgage is a form of equity release, where you can release cash to yourself in, like, a lump sum or a regular payment. You are, effectively, borrowing money from the future value of your house but, in the meantime, you get to live there and enjoy it. You can pay the interest off, like you do for a credit card, to keep down the cost, but the important thing is you never owe more than the value of your house, so you’re never passing down debts to the next generation.

Shirley: Chris, what are the things you’d recommend that people start thinking about as they approach retirement age?

Chris: Look, Shirley, I think people should really try and take the time to engage with it. Research that we’ve done shows that people spend more time, believe it or not, choosing the car they’re going to buy when they’re retiring than they do actually planning their retirement finances. So, we say to people, do some work to bring all your pension pots and other things into one place, if not literally then at least into paper.  And, try and figure out and think through what you need to spend in retirement and what you might like to spend money on. And, think about how prepared you are if things don’t pan out as you hope.

You’re going to receive, as you get close to retirement, lots of information and things like wake-up packs from your pension providers. Have a look at them, go online, shop around, and take up the offers of free advice that are out there, for example, from Pension Wise, which is a government backed organisation which gives everybody coming to retirement a free consultation, either over the phone or locally. So, lots of things people can do to prepare.

Shirley: If you’re back in your forties, what should you be thinking about? I think the planning starts, or should start much earlier in your life, in fact, I think it should be taught in schools, how about that?

Chris: Yes.  If people start saving early, a little bit but often that, obviously, really helps. When you get into your forties then some people do what they fall is a, kind of, mid-life MOT and, sort of, taking stock of where they are. So, first of all, you know, do you still have debt, because it might be the best thing to do is to pay off your debt, especially if it’s a credit card debt and maybe even student loan debts these days. So, sort your debt out first, and then, yes, you really ought to be thinking about wealth and health and how long you really want to work and what you really want to do in retirement. So, to have that flexibility, it’s better to start early than late.

Shirley: Alison, do you think there is middle ground for people who want to ease back on work without necessarily letting go of the safety net and social experience?

Alison: Yes, certainly. I think these days employers are much more flexible around their working arrangements, whether it’s working part time or working condensed hours, working from home, we’ve all experienced that quite significantly. And, think people are diversifying their portfolio in many ways and doing a range of things.  Sort of, that kind of job for life and one career has changed quite substantially and people might be doing multiple things, self-employed, consultancy work. So, I think there is much more built in flexibility in the labour market than there was in previous generations to allow people to maybe step away because of care, or maybe explore further education.

Shirley: Thank you, Alison. Chris, we are in strange and difficult time now, with the Coronavirus, does this change how we should approach retirement or are the rules for retirement exactly the same?

Chris: Well, look, Shirley, these are difficult times. I think the first thing we say to people is, don’t panic, don’t rush, certainly, don’t rush to make what could be a really long-term decision when in the short-term you’re feeling, kind of, stressed or pressured. The fundamental rules are still there, the headlines are scary, but things might not be as bad as you think.  So, find out the facts about your situation from your provider, and definitely a good time to talk to your financial advisor.

Shirley:: Some great tips there from Chris and Alison, thank you.

We’ve only just started our exploration of how you can live a more colourful retirement, so make sure you listen to our next episode by subscribing on your podcast listening platform.

Next time I will be meeting more amazing people who are sharing their hopes, doubts and uncertainties for later life, as we talk more about how you can best make the shift from full time work.

Male: I think if people gradually go into retirement that helps them to have these hobbies that are building up around them.

Shirley: And, we’ll hear from the glamorous Tricia Cusden on how she’s combined Rewirement with her own business, as well as the brilliant Emma Byron from Legal and General. You can find out more about retirement planning at legalandgeneral.com/retirement.

Thanks to all our brilliant Rewirees for chatting to me.  In the meantime, keep it colourful.

I’m Shirley Ballas and I’ll catch you next time.