For many of us, saving into a pension throughout our working life is a non-negotiable aspect of securing a comfortable future. Yet, thousands of retirees discover to their dismay that the financial safety net they’ve carefully constructed either collapses or delivers far less than expected. Whether through a company’s pension scheme failure, personal circumstances such as divorce, or shifting economic conditions, this harsh reality can feel like a devastating blow.
I know this all too well. I’ve experienced it firsthand—my final salary pension took a major hit due to two divorces. The second left me with no pension at all, as it was assigned over in a pension-sharing order. At 60, I found myself with only my home and business as financial capital—no pension safety net after 30 years of pension contributions.
This isn’t just my story. There are countless others facing similar challenges. Paul Hughes, 78, for example, saw his £66k-a-year final salary pension plummet to less than £18k when his employer’s pension scheme was transferred to the Pension Protection Fund (PPF). Despite years of promises that employer pensions were as “safe as houses,” many schemes have crumbled, leaving retirees grappling with reduced incomes and uncertainty.
So, what do you do when your pension fails?
While it’s natural to feel despair when faced with such a situation, there are paths forward. The key lies in looking beyond financial capital and focusing on human capital—your skills, knowledge, health, and relationships. These assets can sustain you financially, emotionally, and mentally, allowing you to continue being productive and fulfilled beyond traditional retirement.
Here’s how to tap into your human capital:
- Reframe Retirement: Retirement no longer needs to be about winding down. Instead, think of it as an opportunity to engage in work that excites and energises you—work that doesn’t feel like work. Whether it’s consulting, mentoring, or starting a small business, your experience and skills are valuable. Leveraging them can generate income while keeping you active and mentally sharp.
- Stay Healthy: Your health is one of your greatest assets. Maintaining good physical and mental health enables you to keep contributing and enjoying life well into your later years. Prioritising wellness—through exercise, balanced nutrition, and mindfulness—gives you the energy and resilience to take on new challenges.
- Strengthen Your Network: Your relationships are a vital form of capital. They provide support, open doors to new opportunities, and can even help you find ways to supplement your income. Whether it’s reconnecting with former colleagues or joining new social or professional groups, these connections can be invaluable.
- Embrace Lifelong Learning: Continuing to learn and develop new skills keeps you relevant in today’s fast-evolving job market. Whether through formal education or self-directed learning, sharpening your expertise or learning something new can lead to unexpected and rewarding career paths.
- Maximise Your Assets: If you’re a homeowner, your property can be an important financial resource. Downsizing, renting out a room, or exploring equity release schemes can provide additional income without sacrificing your quality of life. Likewise, if you own a business, think about how you can continue growing or transitioning it into something more flexible, by employing people to do the hard work, for example.
Solutions for Sustainable Livelihoods
For those facing financial challenges in retirement, focusing on human capital opens up opportunities for creating a sustainable livelihood. Whether through part-time work, freelancing, or turning a passion into a small business, there are ways to generate income and stay engaged.
In a world where traditional pensions may no longer provide the security they once promised, the ability to adapt and create a life you enjoy, beyond retirement, is crucial. It’s not about working longer for the sake of it—it’s about finding work that aligns with your passions, where you contribute your unique value, and where the distinction between work and play disappears.
At the Academy of Life Planning, we have a unique process that combines financial capital management with human capital development, we guide individuals in harnessing their human capital to build financially secure and fulfilling futures. We help you take control of your financial journey, ensuring you’re not left in the dark when pensions or other income streams fall short. Our services are designed to empower you to manage your own financial capita, offering practical financial planning advice and strategies to navigate these uncertain times.
If you find yourself in a situation where your pension isn’t enough, know that there are solutions. It may require a shift in mindset, but your skills, experiences, and passions hold the potential for a rich, rewarding future. The most valuable asset you have is you—and with the right support, you can continue thriving well beyond retirement.
For more personalised guidance on how to navigate retirement without a pension or to explore how you can leverage your human capital, get in touch with us at the Academy of Life Planning. We’re here to support you every step of the way.
Q&A: What to Do When Your Pension Fails
Q: My pension has dramatically decreased, and I don’t know what to do. Where do I start?
A: First, take a deep breath. You’re not alone, and there are steps you can take. The key is to focus on what you can control—your skills, knowledge, and experience. Think of your human capital as your greatest asset. You have valuable skills and insights that can still be leveraged to generate income. The next step is to explore how you can remain productive, either by starting something new, re-entering part-time work, or even turning a passion into a business. This is where we can help—at the Academy of Life Planning, we can guide you in identifying opportunities and building a sustainable livelihood that works for you.
Q: I’ve always relied on my pension. What if I’m not sure how to continue working?
A: That’s completely understandable. Many people feel overwhelmed at the thought of working beyond retirement age, especially if you’ve been planning to rely on your pension. The key is to rethink what “work” means. It doesn’t have to be the 9-to-5 grind. It can be something you enjoy—whether it’s freelancing, consulting, or even volunteering, with the added opportunity of generating some extra income. You already have the experience and know-how, and we can help you unlock the potential in those skills. Together, we’ll explore options that suit your lifestyle, energy levels, and passions.
Q: What can I do if I’m not physically able to continue working?
A: Your physical health is incredibly important, and it’s something to factor in when considering your options. The good news is that there are many ways to stay productive without strenuous effort. Remote work, online consulting, teaching, or mentoring are all examples of ways to earn an income while taking care of your health. If mobility is an issue, technology has made it easier than ever to work from home or even set up a small business online. We’re here to help you explore flexible options that match your abilities and passions, so you can create a future that’s not just financially secure but fulfilling as well.
Q: My pension was affected by a divorce settlement. Is there any hope of rebuilding my financial security?
A: Absolutely, there is hope! Divorce can have a major impact on your financial situation, but it’s not the end of the road. Your home, business, and human capital (your skills, knowledge, and experience) are valuable resources that can be utilised to rebuild financial security. This might involve finding new ways to generate income, whether through part-time work, launching a business, or even downsizing or renting out part of your home. At the Academy of Life Planning, we work with individuals like yourself to develop tailored plans for regaining financial stability. It’s about moving forward with the tools you have.
Q: Is it realistic to find new work opportunities later in life?
A: Absolutely! More than ever, employers and contracting businesses are recognising the value of experience and maturity. Whether you want to work part-time, start a new venture, or even offer your skills on a freelance basis, there are plenty of opportunities. Age doesn’t define your ability to contribute. In fact, your life experience can set you apart. At the Academy of Life Planning, we can help you identify opportunities that are realistic, rewarding, and aligned with your current lifestyle and goals.
Q: I’m worried about how to manage financially while I figure things out. What should I do?
A: It’s important to assess your current financial situation to see what resources are available to you in the short term. This might include looking into state benefits, making adjustments to your living arrangements, or even tapping into your home’s equity. In the long term, the goal is to leverage your human capital to create a sustainable income. We can guide you through both the immediate and long-term steps, ensuring you have a clear plan for managing your finances while building towards a more secure future. We have tools for financial planning to be done by you, with you, and for you, you decide which option is right for you.
Q: I’ve just found out my pension won’t be enough to support me. What should I do?
A: It’s understandably stressful when your pension doesn’t meet expectations, but it’s important to remember that your financial future isn’t solely dependent on pensions. By focusing on your human capital—your skills, knowledge, and relationships—you can still create a fulfilling and financially stable retirement. You might explore part-time work, start a small business, or even offer consulting based on your past experience. It’s about finding work that energises you and fits your life.
Q: I don’t want to work forever, but my pension isn’t enough. Are there other options?
A: Absolutely. One of the most important steps is to reframe how we think about work in retirement. This isn’t about working out of necessity—it’s about discovering what you enjoy and can sustain over the long term. Your home could be a financial asset too, through downsizing or renting out part of it. At the Academy of Life Planning, we help people identify ways to generate income while maintaining a good quality of life.
Q: I’m not sure I have the skills to keep working beyond retirement. What should I do?
A: You might have more skills than you think! Many people underestimate the value of the knowledge and experience they’ve gained over the years. Whether it’s mentoring, consulting, or starting a business, your expertise can often be a valuable asset. If you feel you need to update your skills, consider exploring further education or courses that align with your interests. Lifelong learning is a great way to stay relevant in the workforce and can open new doors. Here is a free five minute survey on line from London Business School that will help you audit your financial and human capital, the LBS Diagnostic Tool.
Q: I’m concerned about my health affecting my ability to work. How can I plan for that?
A: Prioritising your health is crucial in any plan to stay active beyond retirement. By staying fit, managing stress, and keeping your mental health in check, you can extend your working life in a way that suits you. This doesn’t mean you need to work full-time; many people find satisfaction in part-time or flexible roles that allow them to stay engaged without overextending themselves. At the Academy of Life Planning, we can help you explore options that match your lifestyle and capabilities.
Q: My pension has failed, and I feel lost. How can I regain control?
A: It’s completely normal to feel overwhelmed, but there are always steps you can take to regain control. Start by assessing all your resources, including your human capital—skills, experience, and network. From there, look for opportunities to generate income in ways that suit your abilities and lifestyle. It’s also important to seek professional advice if you’re unsure where to start. We’re here to support you, offering tailored advice to help you navigate this challenging situation. Here are 100 ways of generating more income.
Q: How can the Academy of Life Planning help me if my pension has failed?
A: At the Academy of Life Planning, we focus on helping you harness your unique skills, knowledge, and experience to build a fulfilling and financially sustainable life. We provide personalised guidance on how to generate income beyond traditional retirement, whether that’s through work, business opportunities, or making the most of your existing assets. Our approach is holistic, meaning we look at all aspects of your life—financial, emotional, and practical—to ensure you have a balanced and secure future.
We’ll work with you to create a plan that fits your personal goals, ensuring that your livelihood is not only sustainable but enjoyable. Whether it’s finding flexible work that aligns with your passions, helping you maximise your property, or supporting you in pursuing lifelong learning, we’re here to guide you every step of the way. Our goal is to give you the confidence and tools to take control of your future, ensuring that your life remains rich in purpose and security, no matter what challenges arise.
Here’s what sets us apart: we don’t sell financial products. We believe that for true integrity in financial planning, there must be a clear separation between planning and product sales. Our focus is on empowering you to become your own financial adviser, giving you the knowledge and confidence to make informed decisions that are right for you—free from pressure or bias.
Feel free to reach out to us for a consultation—we’re here to help you move forward with clarity and confidence.
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