Is ‘flex’ the name of the game? How our life course changes
When it comes to pensions, employment contracts and education, the Netherlands will be a radically different country a decade from now than it is today. People are increasingly expected to be resourceful and rely on their own initiative– and that includes managing their finances. How does this trend affect you and Rabobank?
Banking for the world of the future
Rabobank held a series of meetings with members of the scientific community, employees, customers and representatives from various NGOs. We discussed some of the key economic and social trends of our time in which Rabobank might be able to play a role. We shared the outcome of these meetings in a series of articles with the theme ‘The World of Tomorrow’, and this week’s topic is ‘Financial life cycles’.
“People are expected to become more flexible and self-reliant at all stages of life. At crucial times in their life they are reaching the limits of their capabilities, which may include their skills, their time, their health, and certainly their financial resources as well,” says Rabobank economist Leontine Treur.
Greater job flexibility...
‘Flexibility’ is the name of the game in the contemporary workplace, with 23 per cent of all employed people in the Netherlands having temporary contracts, doing temp work or working flexible hours. Nearly 17 per centof the working population are currently self-employed, either as sole traders or as business owners with their own staff. Less than 25 per cent of graduates manage to find permanent jobs within eighteen months of graduation, compared to more than 50 per cent in the year 2000.
...and flexibility in housing?
Flexible workers tend to earn an irregular income and move around more frequently than those with permanent jobs, and the housing market needs to change to accommodate this trend. Leontine Treur: “If you can easily find an affordable place to rent, you’ll also find it easier to move house more frequently and to build up some savings. Housing mobility is important in terms of the flexibility working people are looking for, but the Dutch housing market, unfortunately, does not really offer that kind of flexibility. I should add that Rabobank and other financial institutions are adapting to this changing labour market, for example by providing flexible workers access to mortgages. Before, mortgages were restricted to people with permanent jobs.”
...and in training and education?
A flexible labour market also means that people will need to keep developing and honing their skills throughout their careers. Treur: “Technology is changing rapidly, and many countries have been compelled to raise their retirement ages. Those in the workforce today may have formally finished their studies, but they are expected to engage in life-long learning. Their education is never complete. The Netherlands has room for improvement, since we lag behind other countries – including France and the Nordic countries – when it comes to life-long learning. And flexi-workers are lagging behind employees on permanent contracts. If you plan to invest in your education, you need to have the financial resources to do so, and that’s something that many working people and job seekers tend to lack. Rabobank might be able to provide a solution to help them out.”
...and what about seniors?
We may experience a number of challenges as we grow older, including health issues and the responsibility to find proper care for our elderly parents. “The need to take care of older family members may motivate some people to take early retirement or cut back their hours. People are expected to compensate for the financial loss themselves. Is this realistic? Can our bank provide a solution for these customers?” asks Rabobank’s Elze Vonk, who is responsible for financing, payments and insurance for retail customers.
Living independently as long as possible
Average life expectancy in the Netherlands – as in many other countries – is on the rise, and the elderly make up a growing share of the population. By the year 2025, an estimated 1.8 million people in the country will be older than 75, and this number will increase to 2.6 million by 2040.
The recent overhaul of the Dutch healthcare system presents older people with the challenge of how to continue living at home independently as long as possible. Leontine Treur: “The majority of senior citizens would like to continue living in their own home, which often means their home needs to be modified to accommodate their requirements. How can we continue to support these people financially at this stage of their lives?”