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9m adults change jobs during covid pandemic

17/02/2022
RETIREMENT
  • Covid pandemic, lockdowns and working from home has prompted many to change jobs 
  • Pay rises (27%)  and a more enjoyable job (22%) were the most common reason for changing jobs
  • More than half of job changers say they increased income but 18% took a pay cut 
  • 12% of job changers say they increased income by £10,000 or more

Research from pensions and retirement specialist LV= highlights how Covid pandemic has prompted millions of people to make changes to their careers.
The LV= Wealth and Wellbeing Monitor* - a quarterly survey of 4,000+ UK adults – reveals:

  • 28% (9m) working adults have changed job since the start of Covid
  • Some working adults changed job due to a promotion (11%) and some chose to do a similar role for a different company (10%)
    More than 1 in 10 (12%/ 3.9m) working adults completely changed career (do a completely different type of job). 
  • More than half (51%) who took a new job increased their (pre-tax) income  with 12% increasing income by £10,000+
    Nearly one in five took a pay cut (18%) with 4% saying they reduced their (pre-tax) salary by £10,000 a year or more
  • 33% of people in high income households with an income of more than £100,000 have changed jobs, a third (32%) took up a new hobby and 1in 10 (9%) took up voluntary work 

Reasons for changing job
Higher income and lifestyle factors were important reasons for changing jobs while the rise of working from home has prompted many to reconsider their priorities. The top reasons for changing jobs were:

  • A higher income 27% 
  • Wanted a job they enjoy more 22%. 
  • Redundancy 19% 
  • Wanted a more reliable income 18%
  • Wanted to work from home 16%
  • Less stressful job 16%
  • More flexible hours 15%
  • Shorter commute 14%
  • Wanted more time with family or partner 14%
  • Decided to move to a different area 13%
  • Wanted to do something that makes a difference 13%
  • Wanted to work part time 12%
  • Wanted to work for myself 9%

Pay rises and pay cuts
The top reason people changed job was a higher income and 51% of people who changed jobs since Covid say they are now on higher pay. A smaller proportion (18%) reduced their income with their new job. 

Of those people who changed jobs, the research shows:

  • 12% increased their income by £10,000 or more
  • 15% increased their income by between £5,000 and £10,000
  • 25% increase their income between £1,000 and £5,000
  • 22% pay stayed roughly the same
  • 11% reduced their income between £1,000 and £5,000
  • 4% reduced their income by £5,000 and £10,000
  • 4% reduced their income by £10,000 or more

Changing jobs? Financial points to consider 

  • Consider pensions and other benefits alongside salary – How do the benefits under the new job compare against those offered by the existing employer.
  • What will happen to any pension built up in the previous job?  A final salary pension is probably best left alone, but for other schemes there can be benefits of consolidating them into one. A financial adviser will be best placed to ensure you get the most out of your pension savings.
  • Many employers offer a death in service benefit, often as part of the pension scheme. Consider what is offered in the new role and what will be lost, since it may be a point to review whether additional life insurance or critical illness cover is needed (or no longer needed).  
  • Inform your financial adviser of the role change – this may require a review of your finances to ensure you’re still be on track for any financial goals.
 

“It’s understandable why many people have decided to change jobs or careers and it is good to see more people taking control of their lives and making career choices that work for them. The jobs market is relatively buoyant, and the opportunities available along with rising wages make it easier for people to manage the financial aspects of their lives.  

“The Covid-19 pandemic has been incredibly difficult for the nation and had a huge impact on the lives, personal finances and jobs of millions of people. The easing of lockdown restrictions means that, as life is slowly returning to normal, millions of people are reassessing their lives and careers. 

The majority of people in our survey who have changed jobs are now on higher pay but a significant number took a salary cut. Taking a lower-paid job does not automatically mean your personal finances are affected, particularly if a new role does not include expensive commuting costs and lower child-care costs. 

“It is worth revaluating your personal finances, retirement and protection plans when changing jobs. A lower-paid role is likely to lead to lower employer contributions into your work pension, and it may be that you have to increase contributions to ensure the retirement you want. A higher paid job can allow you to increase your pension contributions and attract larger contributions for your employer. 

“Consulting a financial adviser about your pension plans when you change job is a good way to ensure your retirement plans stay on track.”  

 
Clive BoltonManaging Director of Savings and Retirement at LV=

Notes

* LV= surveyed 4,000 nationally representative UK adults (of which at least 500 were mass affluent) via an online omnibus conducted by Opinium in December 2021.