The forgotten generation? Retirement income prospects GenX

• Context
• The study
• Key findings
• Points to consider

Context

Many Generation Xers – those born between 1965 and 1980 - face retiring without an adequate income. Among other issues, the ongoing COVID-19 pandemic, high housing costs, low returns on investments, job insecurity, increasing caring responsibilities, and low increases in wage rates, are making it more difficult for those aged between 40 and 55 to adequately prepare for retirement. It is important to address this issue now as, with the right actions, there is still time to remedy the financial barriers and pension shortfalls facing this cohort.

The study

The study was undertaken by the International Longevity Centre (ILC) which is a charity, and the UK’s specialist think tank on the impact of longevity on society. The project was supported by the Phoenix Group, a savings and retirement provider. The study comprised a series of panel discussions, and a nationally representative survey of 6,035 UK adults aged 40-55 (Gen Xers), conducted by YouGov during 13th - 24th November 2020. The survey was carried out online.

This paper reports on interim findings; there will be a more detailed report published in early 2021.

Key findings

• Low retirement incomes: Many Gen Xers can expect low incomes in retirement. Lots are pessimistic about the likelihood of retiring, while others may be sleepwalking towards this outcome. The study found that at least 1 in 3 are at risk of retirement with incomes that would result in minimum standards of living.
• Barriers to saving: Many Gen Xers find it hard to prepare for retirement due to a lack of financial stability and other pressing priorities. More than half of Gen Xers in the study who are yet to retire said they want to save more but are struggling to do so.
• Impact of COVID-19: The economic fallout will set back many Gen Xers, but it could also increase engagement in retirement planning. Some have also been able to save more in lockdown.

Points to consider

• Methodological strengths/weaknesses: No information is given about the panel discussions: how they were recruited, who attended, where they were carried out, or the questions asked.
  • Few details are given about the survey component other than that it was a sample that was weighted to represent 40-55 year olds in the UK.
  • The authors report actual numbers of people affected by scaling up using data in the YouGov survey. They don’t report validating these number elsewhere.
  • The report is sponsored by a commercial provider of savings and pensions, which may not, in itself, be an issue. However it would be useful to understand the degree to which the sponsor was involved in the design of the project, and also to see the research instruments to understand how questions were phrased, to be sure that there are no biases in the data.
• Relevance: This report is topical as members of this cohort are approaching retirement age, but there is still time to address shortfalls where they exist and protect people from retiring without sufficient income.
• Generalisability/ transferability: This report relates only to this age group and to the UK, as pension markets will differ in other countries.
  • This report is applicable to anyone with an interest in pensions and savings, or in the financial capability and safeguarding of older people, such as government, support agencies, policy makers, policy implementers, regulators or educators. It is also applicable to members of Gen X themselves.