Young people in the UK embrace ‘mini retirements’ as they redefine approach to careers and wealth

A brand-new HSBC report has revealed that younger generations are moving away from traditional linear careers and embracing the trend of ‘multi retirements’, which involves taking regular mini retirements – longer-term breaks - to prioritise personal fulfillment.

HSBC’s Quality of Life: Affluent Investor Snapshot report, which surveyed more than 10,000 affluent adults in 12 markets around the world including 2,000 in the UK, found that leading motivations for taking a mini retirement include quality time with family, to travel and explore, and individual well-being.

The Six Year Switch – a cyclical phenomenon

Younger generations are more likely to plan a mini retirement in the future, with 63% of Gen-Z and 57% of Millennials confirming they want to take at least one, compared to 32% of Gen-X and 13% of Baby Boomers (42% national average).

Taking a mini retirement was seen positively across all generations, with 89% of those who have taken at least one saying it improved their overall quality of life.

Respondents from the UK prefer a longer break compared to the global average, with 35% planning to take at least six months off work and 32% taking in excess of a year, to take a mini retirement.

Xian Chan, Head of Premier Wealth at HSBC UK, said: “There has been a mindset shift among younger people especially, who are embracing a more non-linear approach to building their wealth and career. Many are choosing to take ‘mini retirements’ throughout their lives, to explore career opportunities and prioritise personal fulfilment.

“Retirement is traditionally a stand-alone event at the end of one’s career and a milestone we will spend most of our working life saving for. A ‘mini retirement’ will therefore also take thoughtful financial planning.”

Funding international aspirations through entrepreneurial endeavours

Younger generations are more likely than older generations to plan multiple mini retirements, with 67% of Gen-Z respondents who aspire to take a mini retirement planning at least two breaks, of which 14% are aiming for over three.

Interestingly, only 46% of total respondents intended to take a mini retirement in their home market, while ‘travel and exploring without constraint’ was the leading motivation for Gen-Z (30%) and Millennial (31%) respondents. In the UK, the most popular destination for an out-of-country extended break was the US (33%), France (20%) or Spain (19%).

In order to fund their break, Gen-Z respondents in the UK voiced that they hoped to start a business (33%), which was comparatively higher to their older counterparts, and are also relying on income from digital products or social media (28%), exploring entrepreneurial endeavours alongside savings and investments, following Millennials who scored highest of all generations in terms of income from digital products or social media (32%).

All generations predominantly rely on savings to fund their mini retirement, while also dipping into passive income generated by investments, including dividends, interest or capital gains.

Xian Chan added: “While some will follow a pattern of saving up and budgeting for their ‘mini retirement’, others will also use this period to explore new income opportunities, such as launching a new business. With the rise of digital nomads and remote entrepreneurs, this lifestyle is aspirational for many.

“However, anyone embarking on a ‘mini retirement’ will need to ensure they’ve made adequate financial provisions and have built resilience and stability before they embark on a journey with less income certainty.”

Six considerations to plan a mini retirement today, or in the near future (from Xian Chan):

1. What would you do with your planned break to make it transformative? Whether it’s seeing the world, learning a new skill, launching a business, or simply being more present with your family, it’s important to look at the reasons you want to take a mini retirement to maximise the benefits.
2. How long does your mini retirement need to be to support you reach your goals, and how much will this cost? It’s key to consider the amount of time you want to take, based on your aspirations and the goals you want to achieve in this time. The next step is to budget, which will depend on a variety of factors, including where you plan on travel and the income sources supporting your break.
3. What steps can you take today to help this become a reality? What needs to change about your daily routine to reach your goals? It may be that you need to drum up your savings routine, diversify your investments, or unlock new revenue streams so that the break is affordable. Or, if your aim is to reinvent your career and launch a business, it’s important to also consider if you have all the tools, funding and resources you need to do so.
4. Would you benefit from financial advice to help you plan for a mini retirement? When planning for big financial milestones including a mini retirement, it’s important to consider if financial advice would benefit you. A financial advisor can help you map out how this break might interfere with any long-term goals, or if you’re planning a break in the future, can help you make a financial plan to achieve this within your chosen timeframe.
5. What is your long-term wealth vision and are you still on track? It’s important to not lose sight of long term aspirations whilst you’re planning your mini retirement. Set clear goals that are categorised as short-term, medium-term and long-term, and a diversified portfolio that encourages both market resilience and ensures your money is working hard for you throughout the break and beyond.
6. Fast forward six years. What financial decision can you make today that will power your future? Whether it’s big or small, implement a step today that you align with healthy financial habits – so what over time, you have more to invest in your passions and personal fulfilment.

HSBC’s global network, suite of resources and partnerships equip customers with the tools to plan and budget for their retirement.