What we can learn from Japan’s life lessons

Elle Tucker

Retirement is changing all over the world, not just here in the UK.

Take Japan. As a global tech hub and the birthplace of cool trends like sushi, karaoke and cutting-edge fashion it has a youthful vibe, but it also leads the way when it comes to another trend: it has one of the highest life expectancies of any country in the world.

A diet of fresh, unprocessed food, fish and less sugar is helping many people stay healthier for longer, according to a study by The British Medical Journal.

But having one of the world’s most ageing populations does bring its challenges.

Many people of retirement age in Japan already have to work longer to support themselves. In fact, according to The Japan Times, they “accounted for 11.8 percent of the nation’s total workforce in 2016, compared with 7.8 percent in 2006”.

As The Japan Times adds, it’s not always down to choice. “A poll published by the Cabinet Office in January showed about 38 percent of Japanese wanted to work beyond the age of 65, while more than 50 percent would prefer to leave the workforce before that age.”

With Prime Minister Shinzo Abe proposing to delay Japan’s national pension age from the current 65 (the same age for eligibility for the UK State Pension) to 70 or even 75 to reflect the country’s increasing longevity, it’s more likely people will need to work on longer before they can say ‘konnichiwa’ to life after work (that translates roughly as hello).

Early retirement isn’t an option if you don’t have enough savings to give you choices.

With Japan at the forefront of the longer-living trend, there’s much we can learn – and quite a bit we can be thankful for because we are starting to do things differently.

Saving is becoming the norm in the UK

More people are living longer than used to be the case, which could mean some retiring people need to fund 20, 30 years or more and have enough savings to take them up to when they’ll be eligible for the UK State Pension – and beyond.

In the UK, saving into workplace pensions is increasingly the norm, with 10 million people auto-enrolled since it began six years ago.

You pay in and so does your employer, with some tax relief too. As the government-backed TV ads say, while “You work, your pension works…”

Saving this way – with your employer paying towards your future too – could add up to a decent amount of money and give you more choices later on. Of course, a pension is an investment so it can go down as well as up in value and you normally have to wait until 55 to access your money.

As things stand, that’s at least a decade before the State Pension kicks in if you’re eligible, and this could rise in future.

So how can you save more for the future and increase the opportunity of more choices as to whether you work on or retire?

Here are our simple steps.

Get familiar with your savings

  • Find out where your own savings plans stand and get a clearer idea of how much you might need to save to enjoy the retirement lifestyle you want by trying our pension calculator.
  • If you’re already putting what you can into a pension, you can keep track of what you’re saving online or through an app (you can find the Standard Life app here) and adapt your plans when you need to.
  • Upping your contributions even just a little can bring significant rewards, and could turn a few pounds every month into thousands of pounds into your pension in the long run, as this Moneywise article explains. Or you can consider whether you might want to save into an ISA.

Get to know your State Pension age

Then there’s the UK State Pension. The age it starts at and how much you can get has changed. Take control by finding out what you can expect, and when, by visiting the Government’s Check your State Pension site, like the 13 million others who have done so already.

Our article ‘The State Pension – what do I need to know?’ goes into more detail.

Choices for the future

While what’s happening in Japan shows the effect an ageing population can have, we have more choices here in the UK than we’ve had for a while when it comes to saving for the future.

As you can read in our article Retirement reinvented: live it love it – how will you fund it?, there could be a lot to look forward to.

Whether or not you want to try karaoke will be up to you…


Elle Tucker is a freelance journalist working on behalf of Standard Life.

A pension is an investment and its value can go down as well as up and may be worth less than was paid in. Laws and tax rules may change in the future and your own personal circumstances will have an impact on tax.The information here is based on our understanding in June 2019 and shouldn’t be taken as financial advice.