Govt urged to offer pension support to Gen X

The government must work to support Generation X, who are “screwed” when it comes to retirement and have had their situation worsened by the Covid-19 pandemic, according to the International Longevity Centre (ILC).

Research from the organisation indicated that one in three Gen Xers face retiring without adequate levels of pension provision, leaving ILC to urge policymakers to support those born between 1965 and 1980 who were set to retire over the next 10 to 30 years.

Half (50 per cent) of Gen Xers yet to retire said they were worried they would not be able to live the lifestyle they wanted, while 48 per cent thought they would end up worse off than their parents in retirement.

ILC warned that 11 per cent of the generation could be “sleepwalking into financial hardship in retirement”, as they were unaware of their respective financial futures.

ILC director, David Sinclair, said: “From a retirement income perspective, many Gen Xers are, frankly, screwed. Too many are sleepwalking into a retirement where they won’t have an adequate income to meet their aspirations. And their situation has been made worse by Covid-19.”

“They haven’t been able to save enough. Many Gen Xers aren’t going to benefit from final salary pensions. And there is a sense of hopelessness about how they might turn things around.

“There is some good news, however. Some people really do want to save more. They just don’t see how they can do it. Government and industry must find a way to lever this willingness and ensure public policy better addresses the barriers too many are facing to saving.”

More than three-fifths (61 per cent) of Gen Xers could not afford to save more or were prioritising paying off debt, while 29 per cent said they had too many other pressures and priorities to think about when asked about which four main factors that made it hard to save for retirement.

The other most commonly referenced factors were insecure incomes and outgoings (19 per cent), a lack of motivation (13 per cent) and a lack of information (10 per cent).

Additionally, ILC noted that 12 per cent of Gen Xers who had yet to retire were now spending part of their savings during the coronavirus pandemic, while 13 per cent said they are saving less as a result of Covid-19, amounting to 2.6 million people who have had their savings disrupted by the event.

Former Secretary of State for Work and Pensions, Lord Hutton, commented: “The Turner Report helped to establish a national consensus around the need to encourage greater retirement saving. This report from the ILC has highlighted the fact that many people still find it very hard to save sufficient money to cover their retirement needs.”

“We will need a very significant focus on Generation X as we consolidate the enormous progress we gave made since 2005 in establishing an effective and inclusive pension savings policy. “

Phoenix Group managing director, customer savings and investments, Jenny Holt, said: “This is a clear call to action to help improve the future of Gen Xers. One in five of the UK population are Gen Xers and millions will face problems because of inadequate retirement savings if actions aren’t taken to help them understand their current position and the options available to them.”

“This is the generation that entered the job market too late to benefit from final salary pensions, yet too early to benefit from schemes such as auto-enrolment. The combination means that without appropriate intervention many Gen Xers are expected to face very significant challenges in retirement, and even pensioner poverty.”

“Policymakers, industry and business need to work together to help this generation, including ensuring they have access to the right support – whether that’s guidance or advice – when they need it. With the Covid-19 impact putting additional strain on finances this need is even more urgent.”

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