Gen X face ‘huge pension black hole’ with two thirds not saving enough

Generation X are facing a “huge pension black hole” as two thirds (66 per cent) will have inadequate savings at retirement, Interactive Investor’s analysis of data from the Department for Work and Pensions (DWP) has revealed.

This comes after the DWP published research that discovered that 59 per cent of those with a defined contribution (DC) pension who are retiring in the 2030s are not saving enough.

This was found to be in contrast to defined benefit (DB) savers in the same age group, only 34 per cent of whom are currently facing a pension shortfall.

DWP’s research also detailed that 59 per cent of DC pension savers will reach state pension age with inadequate pension savings before taking their lump sum and 66 per cent have inadequate savings after withdrawing their lump sum.

Speaking on these findings, Interactive Investor head of pensions and savings, Alice Guy, stated that those savers aged between 43 and 58 are “facing a huge pension black hole in their pension saving” due to their lack of savings.

Guy referred to these savers as the “forgotten generation” as they have missed out on DB pensions, which had largely been closed to new employees, and also missed out on auto-enrolment from a young age.

She stated: “For someone now aged 60, this means they may have only had access to a workplace pension since around aged 50, leaving them with a huge pension gap.

“Given these figures, it’s extremely disappointing that the government have decided to push back pension dashboard legislation.

“Time is running out for older workers to get on top of their pension saving and the delay will make it harder for older workers to keep track of all their pensions and see if they’re saving enough.

“It’s extremely worrying that so many pension savers retiring in the 2030s are facing a pension shortfall as they have only around ten years of working life to make up the difference.”

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