Tempted by a 'lazy job'? It could cost you in retirement

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• Views split on whether #lazyjob trend is empowering or offensive but Standard Life analysis highlights how a 1% yearly salary rise rather than 3.5% could lead to £186,000 less in retirement

The rise of the ‘lazy job’, a trend promoted across social media in which people do the very minimum required at work, often with limited expectations of securing career progression, has become a theme of the post-pandemic years. Social posts on the theme have thousands or even hundreds of thousands of views and it’s often associated with Generation Z and Millennial workers in white-collar jobs, however the real prevalence of this approach to working life in any group is far from clear.

There are many reasons why people might favour a more relaxed approach to their career, including prioritising personal wellbeing and work-life balance. However, new analysis from Standard Life, part of Phoenix Group, highlights the potential retirement consequence of earning less for longer.

Standard Life found that someone who started working with a salary of £25,000 per year and paid the minimum monthly auto-enrolment contributions (5% employee, 3% employer) from the age of 22 could have a total retirement fund of £488,000 by the age of 68 if their salary increased by 3.5% a year, illustrating traditional career progression. However, if they chose to reject the career ladder and their pay rose by just 1% a year, this could fall to £302,000, £186,000 less than if they’d seen a consistent 3.5% rise. On the other hand, those who receive consistent strong salary growth of a 5% pay rise each year, they could have a pot of £680,000 at retirement.* The figures are not adjusted for inflation.

Total retirement fund at 68*
Salary increase	High salary growth (5%)	Mid salary growth (3.5%)	Low salary growth (1%)
Total Retirement Fund at 68*	£680,000	£488,000	£302,000
Retirement Fund Difference	+£192,000		-£186,000

*if beginning working with a salary of £25,000 per year and paying 3% employer and 5% employee monthly contributions into a workplace pension at the age of 22, assuming 5% investment growth and a 1% investment charge, no minimums applied.

Dean Butler, Managing Director for Retail Direct at Standard Life, part of Phoenix Group said: ‘Social media has been full of people talking about ‘lazy jobs’ and ‘bare minimum Mondays’ recently, and they’ve come to be associated with Generation Z and younger Millennials. In reality it’s not helpful to pigeonhole different generations and people’s goals are often remarkably similar when it comes to achieving financial security and a job they enjoy. There is some evidence that younger generations put a higher value on work-life balance and wellbeing¹ but this isn’t incompatible with climbing the career ladder. What the analysis does show is that over time, the difference between consistent and low salary growth will have significant retirement consequences.

“Retirement savings is one of those things that hides in plain sight, especially when younger. It’s always worth considering long-term saving as part of your overall wellbeing – pensions might not always seem an immediate priority, but how and when you save could have a large bearing on your future. Having an idea of the standard of living you’d like in retirement, and the pot size necessary to achieve it, can be very helpful when factoring long-term saving into your plans. The Pensions and Lifetime Savings Association (PLSA’s) Retirement Living Standards are a great place to start, and there are a number of online pension calculators that can help you see if you’re on track, even early on in your career.”

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Notes to editors

Calculations assume the following:

Starting Salary	£25,000
Starting Age	22
Employer Contribution	5.00%
Employee Contribution	3.00%
Investment Growth	5.00%
Annual Investment Cost	1.00%

Calculations are intended only for the sole purpose of providing an illustration regarding the projection of savings and pensions. They should not be used with the intention to give an accurate representation of real world outcomes

¹4 Things Gen Z and Millennials Expect From Their Workplace (gallup.com)

About Standard Life

• Standard Life is a brand that has been trusted to look after peoples’ life savings for nearly 200 years
• Today it proudly serves millions of customers who come to Standard Life directly, through advisers and through their employers’ pension scheme.
• Standard Life is part of Phoenix Group, the largest long-term savings and retirement business in the UK. We’re proud to be building on nearly 200 years of Standard Life heritage together
• Our products include a variety of Pensions, Bonds and Retirement options to suit people’s needs, helping our customers to invest and save for their future. We’re proud to offer a leading range of sustainable and responsible investment options.
• We support our customers on their journey to and through retirement with comprehensive, easy-to-understand guidance so they can invest in the right way for their needs, and plan a future they feel confident about.
• The value of investments can go down as well as up and may be worth less than originally invested.