Young adults aged between 18-34 expect to have an average of three different careers over their lifetime with a five-year pension holiday, according to a new study commissioned on behalf of Handelsbanken Wealth & Asset Management.
The research underlines how work and pension expectations differ significantly between the generations; people aged 55 and over have had, on average, two careers and have taken just two years off from paying into their pension.
The biggest reason for switching careers, cited by over one in four (27%) respondents, is to take advantage of brand-new job types that did not exist before, created by factors such as disruptive technology.
As well as changing careers more frequently, the younger generation is twice as likely than those approaching retirement to do so for a better work-life balance, according to the research.
One in four (26%) 18-34-year-olds would switch their job type to improve their quality of life, compared to just 14% of those aged 55 and above.
The research also revealed that 18–34-year-olds, on average, expect to take a five-year pension holiday over their working life, over twice as long as those over 55, who have skipped pension scheme payments for an average of just two years.
Of those expecting to take pension holidays, the main reasons were travelling (21%), dealing with health concerns (18%), accumulating enough wealth and no longer needing to work (16%) and affordability reasons (16%).
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.
“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.”
