Take stock and face the future

May 6, 2005

It's never too early or too late to start thinking about your retirement, writes Harriet Swain. Even if you have the financial side taken care of, you should still give some thought to the details of day-to-day life

Finally. After all those years of combining research with casual teaching and working in a pizza parlour you got the job. Isn't it about time you started thinking about your retirement?

Phillip Hodson, fellow of the British Association of Counselling and Psychotherapy, says you need to give yourself between five and ten years to think about what will happen when you retire. This is for emotional, as well as for financial reasons: bluntly, if you don't, you are more likely to die soon after you stop work. "You have to be able to live a different life," he says. "Why would you suppose these skills will suddenly be there unless you develop them?"

He says you have to think about how to deal with a different relationship with your partner and children, as well as with your brain. "Academics should have a well-trained and well-functioning brain but if they then just watch EastEnders that brain will quickly fall into disuse," he says.

One way to keep your mind ticking over in the meantime is pension planning.

This is really an activity for young people, says Malcolm McLean, chief executive of the Pensions Advisory Service, Opas. What you must do well before retirement looms is find out what your income will be.

Then, if you think it looks too low you can do something about it.

"Everybody ought to have a plan," he says. It might involve investing in property or even speculating that little bit of inheritance you've just had from your long lost great aunt. The likelihood is it will come from a variety of sources.

One of these should certainly be a company pension scheme. "If you are working and not in a company pension scheme you are, in effect, turning down pay," McLean says.

Chris Cheesman, assistant general secretary responsible for pensions at the Association of University Teachers, says ensuring the maximum pension on retirement will probably involve either buying additional years of service through your existing pension scheme or making additional voluntary contributions to a money purchase scheme provided by an insurance company.

Pension rules will change from next April to increase opportunities for adding to your pension. But Cheesman suggests acting fast. "People should be thinking about investment and their future as soon as they can," she says. "The earlier they buy added years the cheaper it is."

She also warns those on short-term contracts not to dither about joining a pension scheme. "People think: 'I'm only going to work for a year, there's no point,'" she says. "But that contract is renewed, then another one, and after about 20 years they realise they have no pension."

But she advises consulting a financial adviser to find out about the best approach for your particular circumstances - and making sure you have the help of your union if you are offered early retirement.

It is also worth thinking about other ways to supplement your pension, she says. The Teachers Pension Scheme allows retired members to return to work on a reduced contract and accrue more pension while they are at it. No such arrangement exists as yet for members of Universities Superannuation Scheme but this may change.

Continuing to work once you retire may be a good idea, even without the financial advantages, says Alan Walker, director of the Economic and Social Research Council's New Dynamics of Ageing Programme. "Maintaining activity and keeping an active mind are clear indicators of good health and wellbeing in old age," he says - as are friends. "In terms of good quality of life in old age, those with strong social networks tend to be happier."

Gus Pennington, who officially retired more than three years ago as chief executive of the Higher Education Staff Development Agency but still works for one or two days a week, agrees. He says that he has benefited by having a well-developed network of contacts, which he used in casting around for interesting jobs, and which meant that he was approached and offered work as soon as people heard he was retiring.

He urges retired academics to recognise that their experience and knowledge is valued by the sector and to think carefully about how it could match the needs of an institution, or higher education generally. "Retaining people and not letting expertise go is very important," he says.

However, expertise is only valuable if it is current. Pennington says it could be a mistake to think you can take a few months deserved break when you retire before trying to find something to do with the rest of your retirement. "The sector is moving incredibly quickly and you can find you are seriously out of date within six months," he warns.

He works as a consultant for websites and journals such as The Times Higher , as well as talking to people still working in universities. "A lot of people, without realising it, pass their sell-by date," he says.

If you think you might be approaching yours and want to retire but are too worried about the future to do anything about it, take the leap, Pennington advises. By staying, "you become a pain to yourself and other people", adding: "I have to tell you, retirement is wonderful."

Further information
www.opas.org.uk - Office of the Pensions Advisory Service
www.dwp.gov.uk - Department for Work and Pensions

TOP TIPS

* Start thinking about your pension early

* Network

* Plan to keep both physically and mentally active

* Recognise the continued value of your expertise

* Keep up to date

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