Retiring in the UK in the 21st Century

For some people today, retirement has changed beyond recognition when compared to retirement 50 years ago. In this article, I aim to explore some of the underlying factors affecting retirement today and to explain some of the ways in which I have (as a recent UK retiree) have tried to maximise my “retired experience”.

First of all, what do I mean by “retirement”? My definition is simple; it’s the moment when you cross over from “full time employment” to “NOT full time employment”. For most of the 20th century, this happened at the age of 65 for a man and 60 for a woman. Since 1909, the retiree became eligible to receive a State Pension which was meant to be enough to survive old age. The brutal reality was that average life expectancy (in 1910) was around 51 years. Many people simply didn’t reach pensionable age and those that did often died within a few years anyway.

In 2020, male life expectancy was about 81 years. So a man who retired at 65 might expect to live for about 16 years in retirement. As a result, the UK population of retirees has “boomed” in recent decades. Life for a retiree in the UK has changed dramatically in other respects since 1910. In general, life offers more possibilities in terms of activities and experiences but many of those possibilities demand a higher level of sustained income in old age. Markets have grown up to offer the retiree population a much wider range of products and services and the retiree population is a significant demographic in today’s world. But none of this makes retirement planning straightforward.

From my own experience, I think there are 3 key ingredients to a successful retirement: finances, health and purpose. Let’s look at each of these in turn.

I think that most people who plan in any way for their retirement focus solely on the finances. The more astute (or plain lucky in my case) will begin building a retirement nest egg early on, perhaps in their late 30s or early 40s. The less astute and the unlucky will be financially “just surviving” from pay cheque to pay cheque and won’t think about retirement until much later. My “Rule of Thumb” for finances is really easy – “Save as much as you can afford from as early as possible”.

I know that sounds blindingly obvious but let’s do the maths! Assuming an annual interest rate of 2%, a lump sum of £1,000 deposited at the age of 30 will grow to £2,000 by the age of 65. Starting at 40 yields £ 1,640 and at 50 just £1,346. If you deposit a further £1,000 annually, the figures are more startling: starting from 30, you get over £74,000; from 40, you get £ 52,000 and from 50, you get only £18,600. So the point is made: start saving early!

My 2nd ingredient for a successful retirement is “health”. I see this in the widest context from the more obvious preventative actions you can take (such as watching your diet and maintaining a certain level of exercise) to ensuring that you consult health professionals early and with determination when you have concerns.

Again, perhaps this is blindingly obvious but without good enough health, life can spiral negatively very quickly and it’s much more difficult to recover good health than it is to stop it deteriorating in the first place. Having said that, I know of course that we’re all individuals with our own individual “lottery draw of life” and that some aspects of our health is written in our DNA. That’s not, however, a reason to give up and let nature decide for you. Look after yourself – you only have one shot at this!

My 3rd and final ingredient for a successful retirement is “purpose”. For me, this has been the most difficult aspect of retirement. My experience has been that, during the early months of my retirement, my main feeling was one of release from the strain of, in my case, 39 years of continuous and mostly full time employment. It was a great feeling that my time was suddenly largely my own with no commitment to be in a certain place of work for a number of hours 5 days a week. For me, this is accentuated by the fact that my wife still works full time, so the hours I used to work really are mine and mine alone.

As time went on, I discovered that having the freedom to do whatever I like was no use to me at all if I didn’t know what I wanted to do in the available time. I slipped into reinventing a full time job for myself and found that I was spending most waking hours – daytime and in the evening – sitting at my computer keeping myself busy.

Eventually I realised that what was missing for me was “purpose”; a set of one or more goals of things I would like to achieve. Since that time, I’ve reflected and my purpose (currently) is served by 4 key passions:

• Genealogy: researching family histories for paying customers + time on my own family history
• Personal Learning: I’ve completed several free online courses in topics that interest me
• Time With Mum: in recent years, I’ve tried to help her with her purpose too
• Charity Work: volunteering with local charities, developing my own ideas for a legacy charity

I also spend time relaxing (a morning coffee, time with Patch, watching TV, simply resting). And I’ve written a (now printed) book which contains a collection of 50 short articles that are stories from my life as something to hand on to my children and grandchildren. I also sing in a few choirs which largely satisfies my musical passions and try to keep in touch with a small group of close friends. And I maintain a “Bubbling Under” To Do list of things that I might want to add to my activities at some point.

So, I suppose the point is that I keep myself busy doing things that feel like achievements; meaningful activities that bring me some degree of joy and satisfaction. And I try to watch my finances and health as well to varying degrees of success! And that’s my retired life in a nutshell.