Ten years from now, how, and where we work will have changed dramatically. The COVID pandemic lockdowns of 2020 offered unprecedented opportunities for employers around the world to trial working from home at scale. At the same time, many employees also began to understand that, in some sectors, modern technology enabled them to work effectively from anywhere, provided they had good connectivity.
The age of the ‘digital nomad’ has arrived and they can operate in a wide variety of professions that are conducive to remote work, from graphic designers and software developers through to consultants, educators and virtual assistants.
Shift change
The working population is changing as ‘Millennials’ (born between 1981 and 1996) and ‘Generation Z’ (1997 to 2012) take over from retiring Baby Boomers (1946 to 1964) and ‘Generation X’ (1965 to 1980) to make up the bulk of the workforce. Their expectations of what they want from an employer and how they are employed are challenging industries and employers to adapt.
The younger the worker, the more likely they are to want to work from wherever they want. A 2023 report by MBO Partners, a global talent solutions platform for self-employed professionals, found that 37% of digital nomads were Millennials and a further 21% were Gen Z. This compares to Gen X at 23% and Baby Boomers at just 13%.
These shifts reflect changing dynamics in the workforce and varying attitudes towards remote work and lifestyle across the generations. The MBO report expected this trend to continue as more Gen Z join the workforce and potentially adopt a nomadic working lifestyle in the next years.
Opportunities
Certain businesses now work on fully remote work models, taking advantage of the increasing flexibility in workplace arrangements across various industries. For employers, there can be big potential benefits. They can operate with smaller offices, draw employees from a much wider geographical pool and, due to the flexible working conditions, they can retain them for longer. There is also the opportunity to place some jobs in countries that have good connectivity, but lower salary expectations.
Workers gain freedom and choice. They can decide how and where they work and have the flexibility to adapt as their life changes. They can also choose who they work with, whether that is a single core employer or a range of different employers.
With the cost of living rising, they can earn in strong currencies and live in locations where their money will go further. They are also not limited to set working hours and, because they have the flexibility to manage their time, they will have more freedom to enjoy where they are.
How you choose where to live will also change. Digital connectivity rather than physical transport links will be key. That gives small jurisdictions and towns and villages the opportunity to compete and grow their economies. Smaller jurisdictions are already encouraging mobile people to live and work in their territory to benefit their economies through tax incentives or residence packages.
Considerations
The flip side is that competition for roles will not only come from the development of Artificial Intelligence (AI), but people will also be competing against a much wider global pool with different salary expectations. Consequently, digital nomads will have to constantly evolve, and educators should be considering how they need to prepare school children for the world they will be competing in.
Pension plan that follows you and your laptop
Now, more than ever, saving for the future is of vital importance. With people living longer and large generations now either in retirement or moving to retirement, the strain on governments to provide sustainable pensions for life is going to be an increasing challenge.
Gen Z are actuarially expected to live to the age of 100, which means that younger generations could be working well into their 80’s. It is unlikely these populations can rely on governments to support pensions, particularly as the income tax take of many countries may reduce with populations more open to working internationally and the coming revolution in AI and digital innovation.
As a result, individuals need to start saving early if they want to have control and choice as to when and how they retire. Sovereign understands the importance of this and provides an international personal pension (IPP) plan as an easy way to save for your future.
Our IPP is regulated in Guernsey and is therefore anchored in one tax neutral jurisdiction. Its members, however, can live and work anywhere in the world and continue to save with one consistent pension. The plan rolls up income gross of tax and pays out gross of tax, which gives you flexibility to choose where you want to retire.
It is also an online service, which allows you to consolidate your savings in one currency and one place, so it’s easy to keep track of and manage your savings. You are firmly in control. You can take loans from your savings, and you can have access to take the money either in a lump sum or income drawdown from the age of 50.
An IPP is simple, portable and flexible, so it can keep pace with your life. You can stop and start contributions if and when you need. You also benefit from the three ‘superpowers’ of investing:
- Time
- Compound growth
- $/£/€ cost averaging
To find out how Sovereign can help secure your future, please contact Sovereign Guernsey below.
