Not retiring: do I need a midlife MOT?

How many of us truly understand our pension, if we have one, and what can we do to get to grips with long-term planning when the demands of the present are so great and many of us are time poor?

Tax, IR35


Do you understand your pension[s]? Surveys show many people don’t.’s survey of 1,356 women last year found 58% of respondents admitting that they do not really understand their pension savings.

Firstly, there is the fact that most people have worked in several different jobs over the course of their working lives and need help to bring all that information together to understand what their pension income might be in total and whether they can bump it up through additional payments. There is, however, free pension tracing service available here and organisations, such as PensionBee, who can bring your pensions together in one place. The government is working on a pension dashboards programme where you can view all your pensions in one place, but it has been delayed.

Then there is the issue of whether you can afford to draw down some of your pension early [from the age of 55] and maybe retire early or go part time. Going part time can be very tempting, but, at a time of rising prices, what is the long-term cost? Studies keep warning us about the financial impact of taking any time out of the workplace on our retirement income, but is it better to go part time now and possibly be able to work for longer? The problem is that this is all very subjective and individual and no-one has a crystal ball as to what is going to happen to them as they get older.

Midlife has become one of the favoured terms for talking about that period when we start considering our later working lives. It sounds more youthful than retirement planning and indeed more open, given some people will never retire. There are so many things to take into account and it can be hard to find the time to take stock, unless you are forced to by events. As much as we plan, life happens and every plan has to be adaptable to change.

With interest rates rising and inflation not going down and children needing financial help from their parents for longer – possibly for ever! – it can be difficult to contemplate too much change. Maybe it’s better to sit tight. The trouble is the longer term outlook looks turbulent for some time. A pause to talk through some of these issues is vital. The midlife MOT can at least start a conversation about what you might want to do next. The government has created a free online midlife MOT to get the ball rolling, but some employers offer one to one or group sessions.

For many it is the financial aspect that is it the most difficult to nail and that requires understanding our finances better from as early an age as possible. I know I don’t have a good grasp of things and I can see my partner glazing over within five minutes of entering into any discussion with the bank, basically because he thinks they are trying to sell him something he doesn’t want. Independent financial advice would be nice, but for many – and probably those who need it most – it needs to be more widespread and more affordable.

Many of us get through life not thinking too far ahead, often because we can’t. In recent years, there have been some long-term financial planning improvements in terms of pension auto-enrollment, which have boosted many people’s potential retirement incomes, but much more needs to be done to make it easier for people to have enough money to live on in later life. It’s notable that the major employers jumping up and down about longer working lives are pensions firms and insurers. They have done the figures and can see the car crash coming down the line if people don’t keep working. The trouble is a lot of people are trying to squeeze in thinking about their finances among crazy busy working weeks and other responsibilities and many people’s minds are on the immediate rather than the more distant future right now. Employers who provide time – and, ideally, free financial advice – to think through this crucial transition period will be taking a weight off people’s minds.

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