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How multiple careers can impact a pension

We recently highlighted how the average person has 12 jobs over their lifetime. While some of these may indeed be college or gap year roles, there is still a large proportion that falls into the more permanent job category. However, there really is no such thing as a permanent, pensionable job any longer. Given the way employee benefits are now structured, which may include health insurance, life insurance, and pension contributions, it’s really important to keep track on these. In particular, how multiple careers can impact a pension as that is an individual’s future financial security.

Why is this happening?

There are many reasons that there is now such movement in career and job terms for the population. Some of these factors can be put down to the range of different career options available, often driven by advances in technology. Technology is displacing some workers but also mapping new career paths. More recently, the global pandemic had an impact putting a different perspective on remote working options and work/life balance. However, according to the most recent PWC Survey, the top reason cited by individuals for changing jobs is to make more money. This is closely followed by those who wanted a fulfilling job and to “truly be themselves at work”. In fact, according to Linkedin over 1.4m workers in Ireland were open to a fresh challenge in 2022 and we don’t see that figure dropping.

Career and pension gaps

We’ve all heard the term “gap year”. This was traditionally a year off before or during college. While an increasing number of people are taking this year, there is also a growing trend to take it after college, before entering the workforce. This obviously delays starting a pension. The percentage of people who have quit a job without another lined up is higher than ever. There is a buoyant employment market currently. This trend again leads to stops and starts in pension planning. Reduction of work hours, part-time roles, and factors such as maternity leave also have an impact. Finally, there is the gender difference which leaves a big dent on a woman’s pension.

What are the options?

When an individual leaves a job, there is really 3 main options in relation to a pension. Leave it where it is i.e. do nothing, transfer it to the new employer or move the pension into an account in their own name. Likewise, moving from employment to self-employment or vice versa will result in having a number of issues to consider and arrangements to make. There are also other factors to understand, especially in relation to a lump sum with redundancy. With multiple different roles and possibly multiple different pension arrangements, structured in different ways, it can be challenging to keep a track on everything.

Keeping A Track On It All

If you think about it, over the course of a typical 50-years in employment, almost a quarter of a person’s time is spent at work. This is a lot of time to ensure that there is adequate provision for retirement. Without keeping up to date with pension arrangements, an individual may find they have a shortfall in their financial expectations at retirement. It may also be the cause of lost opportunities e.g., the chance to reduce working hours or retire early. But keeping a track on past and current pensions can be time-consuming and tedious. That’s why speaking to a financial adviser is the single thing a person can do.

The Adviser Opportunity

It's important that an adviser has access to the most up-to-date resources and tools to help their clients. That’s where Centric can help. Our goal is to change the way that clients experience their pension and the service proposition from their adviser, for the better. A better client experience means a happier client. Our products are designed to amplify an adviser’s digital brand, positioning them at the forefront of modern technology and their clients’ minds, they provide enhanced client engagement and may boost revenue through both new and retained business.

To see how this could be the solution for your business, just get in touch.


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