Young adults aged between 18-34 expect to have an average of three different careers over their working life and a five-year pension holiday.
This is a change from previous generations, who averaged two careers in a lifetime and skipped pension scheme payments for an average of just two years, according to research with 4,000 UK adults conducted by Opinium for Handelsbanken Wealth & Asset Management.
The research found that younger workers expect to have more careers than the over 55s because new job types are appearing and they value better work life balance.
Expectations of a five year pension holiday are due to younger people facing longer working lives, researchers said.
Career switch
The biggest reason for switching careers, given by 27 percent of respondents, is to take advantage of brand-new job types that did not exist before, created by disruptive technology, for example.
The younger generation is twice as likely than those approaching retirement to switch career to access better work-life balance. One in four (26 percent) of 18-34 year olds would change career to improve their quality of life, compared to just 14 percent of people aged 55 and above.
Of those expecting to take pension holidays, the main reasons were traveling (21 percent), dealing with health concerns (18 percent), accumulating enough wealth and no longer needing to work (16 percent) and affordability reasons (16 percent).
Work-life balance
Christine Ross, client director at Handelsbanken Wealth & Asset Management, said: “It’s no surprise that younger people expect to experience more career changes over their lifetimes than the generations before them. They are more likely to be working for longer, and will face more workplace changes driven by rapid tech advancements.
“However, the biggest generational split was revealed among attitudes to work-life balance, with the younger generation twice as likely as their parents to switch jobs in search of greater flexibility and freedom.
“Over a long and varied career, perhaps it’s to be expected that younger people could decide to take more pension holidays. But it’s important to keep in mind that contribution breaks can significantly reduce the size of your pension pot, particularly in the early stages of working life, as the savings made earlier on are given the longest time to grow.”
She added that amid the excitement of changing careers, the importance of sound financial planning needs to remain in focus.
“If you’re moving to a self-employed role having previously enjoyed the benefits of a workplace pension scheme, can you afford to make private pension contributions? If your new role includes a workplace pension scheme but offers a lower salary, can you make up the shortfall? These considerations needn’t stop you from branching out into exciting new careers, but they should feature in your financial plan.”
