Many wealthy people don’t expect to retire at all and the concept of retirement may be fundamentally changing, according to a new report from Barclays Wealth.

The idea of a prolonged retirement phase is a relatively recent phenomenon, the report from the British bank’s wealth management division says. However, with life spans growing ever longer, this phase has become unsustainable for many households and governments, Barclays Wealth says, particularly in the wake of the financial crisis.

“For the majority of the working population, an expectation that we can stop work at 60 or 65 is therefore unrealistic,” Barclays Wealth says.

Moreover, this sort of retirement may not be sought as avidly as in the past, as people stay healthier for longer and want to keep working longer too. The financial crisis has also seeded more worry about the unpredictability of investment returns, stoking a desire to stay employed longer.

“Higher life expectancies and financial pressures are prompting a general reassessment of ‘traditional’ retirement by the population at large,” Barclays Wealth says, adding that wealthy individuals in particular appear to want to keep working. Barclays Wealth dubs this population ‘nevertirees’.

“Even if a stabilization of financial markets allows the wealthy to rebuild portfolios and regain confidence in the predictability of investment returns in the future, total confidence in the system will take time to return,” Barclays Wealth says. Also, it’s unlikely the other factors contributing to the desire for longer working lives, such as improving health and longevity, are going to reverse themselves.

“For many, retirement age has become irrelevant. Most will keep on working in some form, and the rise of the Nevertiree will have a number of benefits for the economy and the corporate sector,” Barclays Wealth says. “As well as contributing both directly and indirectly to GDP, boards and businesses in the corporate and not-for-profit sector will benefit from the wealth of experience remaining in circulation.”

However, the phenomenon will also create new challenges for individuals, their families and society as a whole, Barclays Wealth says, pointing out that it could lead to a lack of financial planning, and particularly succession planning.

“Those who choose to work longer must still consider whether there is an optimum time for them to relinquish their business interests, or a need to change further the framework of their working lives. They must also consider the timing of and rationale for transfers of wealth within their families,” Barclays Wealth says.

IE