Generation X failing to seek adequate pension's advice

  • 26th June 2020

With retirement edging closer for this generation, don't leave your retirement to chance.

84% of the Generation X area making key financial decisions without seeking any professional advice with many relying on advice either from online sources or from family and friends according to recent research.

Those born between 1965 and 1980 (Gen Xers) have a patchwork of retirement income sources. Three-quarters of those surveyed hold several pension pots that are unconsolidated or dormant according to the report by pension provider Dunstan Thomas. 10 per cent of the 51-54 year old group have four or five unconsolidated pension pots accumulated over the years.

Gen Xers have had the misfortune of spending their working years through the recession of the late 80s and the painful recovery with high costs of borrowing through to 1996. Then the dot com bubble from 1998 to 2001. The next economic hit was the Great Recession from 2008-2013 and now the coronavirus. These events have all unfortunately put pressures on the value of their pension pots.

With an increase to the cost of living, children staying at home longer and this generation having to support their children financially to help them get onto the property ladder, constraining budgets have led to them putting only the bare minimum into their pension pots.

A study published by the Institute and Faculty of Actuaries (IFoA) in October 2019 revealed that to sustain a moderate lifestyle in retirement, you should be setting aside £799 per month. Worryingly the Dunstan Thomas research showed that on average the Gen Xers are only saving £139 - £253 per month. Add to this the fact that many have taken lengthy pension contribution holidays during tougher times, and you can see the picture unveiling itself.

With the pension freedoms on offer for Gen Xers, they really do need to understand the options open to them and how best to make their money work for the future, especially considering that nearly half of them had never heard about the pension freedoms.

55% of Gen Xers think they will not have enough money to retire on but many of these are not looking to address the issues, either burying their head in the sand hoping that something will change by the time their retire, or stating that ‘it is too early to think about retirement’.

36% surveyed are prepared to work beyond retirement to help fund their under-saving, 31% are prepared to be poorer, 26% plan to increase their savings before retirement and 6% plan to emigrate to cut the costs of living in retirement.

With retirement edging closer for this generation, this really is the time to look at your pension projections and act now. The good news is that it is not too late. With professional advice and a plan for what you want your retirement to look like, you can still remedy any shortfall.

Talk to an independent adviser and get your retirement plans back on track.

Information contained within this article is not a personal recommendation of Forrester Boyd Wealth Management. The wording in this article is not to be construed as an offer or advice. We recommend you seek advice from concerning suitability from your investment adviser.

Any news or resources within this section should not be relied upon with regards to figures or data referred to as legislative and policy changes may have occurred.