Age won't keep us from work
A Barclays Wealth Insight report
60% of high net worth individuals in the UK want to keep on working and will never retire
UK is the most likely of developed economies to continue working
Nevertirement set to grow in popularity as younger respondents say they will always be involved in work
Important financial decisions could remain unresolved as work takes precedence
The concept of retirement is being rejected by a new breed of wealthy workers who want to carry on working for as long as they are able, says Barclays Wealth in its latest Insights report, The Age Illusion: How the Wealthy are Redefining Their Retirement.
60% of UK wealthy individuals polled in the survey say that they plan to become a Nevertiree, shunning traditional retirement and instead continuing to work, start businesses and take on new projects in their later years.
The report, the twelfth in the Barclays Wealth Insights series, is based on a global survey of 2,000 high net worth individuals globally, who were asked to consider what retirement and later life means to them.
The findings show that the concept of Nevertirement is expected to become more popular over the coming years, with 70% of respondents under the age of 45 saying that they will always be involved in some form of work. Whilst a desire to remain in work might be expected to chime with business owners and entrepreneurs, the findings apply to all wealthy respondents, with 57% of those who inherited their wealth saying they too will continue working in later life.
Although the emerging markets show the biggest desire to keep on working in later life, the UK leads the way amongst the developed economies. In the US, 54% of respondents expressed a desire to carry on working, with Switzerland (34%), Spain (44%) and Japan (46%) more likely to opt for a conventional retirement.
Top 5 'Nevertiree' countries in Europe
(% of respondents who envisage themselves always being involved in some form of commercial/professional work)
Greg Davies, Head of Behavioural Finance at Barclays Wealth says, "Whilst in previous generations there have always been an energetic few with the health and specific drive to keep actively challenging themselves well past the standard retirement age, many looked to create their wealth early on in life with a view to enjoying it when they retired. This report reflects a different attitude, with wealthy individuals as a group wanting to continue to challenge themselves well beyond the traditional retirement age, which is now likely to comprise a significant proportion of their total lifespan. Indeed, for many their working life is an important part of who they are - it is something from which they derive self-worth and value, and not just a necessary evil to be endured until they can enjoy a leisurely retirement."
David Semaya, Head of UK & Ireland Private Bank, Barclays Wealth, adds: "There are a number of factors driving the notion of Nevertirement, and whilst higher life expectancies and concerns about an unpredictable economy are almost certainly relevant, it is fascinating to see that wealthy people are continuing to work for a variety of other reasons, and indeed that this appears to be something that is set to continue in future generations."
Same lifestyle - new attitude, new career, new role
Rather than look to later life as a time of leisure or years of old-age, 77% of Nevertirees view this period as 'just another phase of their life', suggesting that the traditional retirement age no longer marks any significant milestone in terms of their general lifestyle.
However, the report demonstrates that as well as wanting to keep on working, the wealthy are using the later years to re-examine their options with regards to work, looking for different careers and positions, often moving from the role of execution and control to that of influence.
Dick Pyle, who started two businesses in his 60's, including truffle-tree.com says, "I couldn't imagine myself not working and retirement has never entered my head. When I reached 60, it seemed like a good time to re-assess things and start a new business that I could devote myself to."
Sarah Harper, Professor of Gerontology and Director of the Oxford Institute of Ageing at the University of Oxford says, "People want to contribute, they want to be doing something. Work gives people status, and at an age when you're incredibly experienced you may want to start a second career or even do something completely different from your previous professional life."
Succession, Inheritance and Estate
The report cautions that continuing to work could mean that important succession issues remain unresolved, as the wealthy continue to put their efforts into working life. While retirement was traditionally a time when individuals would make plans for passing on their wealth, Nevertirees in the UK are in danger of leaving these decisions unresolved.
With only half (51%) stating that they feel financially responsible for their children and when asked if they wish to leave a sizeable amount of wealth to their family, the UK is one of the countries least likely to do so, with just over a third (35%) saying they will not pass on their wealth. This is despite the same proportion of respondents saying that their children will be less wealthy than them.
Phil Smith, Head of Financial Planning at Barclays Wealth UK and Ireland Private Bank says, "Even though people may be retiring later this certainly does not mean that they should put off succession planning. It actually means that they should start planning much earlier as their wealth will only increase and the situation can become more complex.
There can be a tendency for people to shy away from succession planning as they believe it to be difficult however given that this 'nevertiree' group may continue to increase their wealth then there is a very strong case here for robust succession planning much earlier on than people expect."
27 Sept 2010
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