Generation X are at risk of falling behind in their finances as they undersave for retirement, according to B&CE, provider of The People’s Pension.
The research from B&CE, which is based on data from the Wealth and Assets Survey and includes research from the Pensions Policy Institute, reveals that 61 per cent of households and almost 63 per cent of individuals aren’t saving enough.
Around 68 per cent of employees in “Generation X,” or those born between 1965 and 1980, and 76 per cent of “Millennials,” or those born between 1981 and 1996, aren’t saving enough. Those who were born between 1946 and 1964, known as “Baby Boomers,” makeup just 41 per cent of the population.
People in the UK would need an income in retirement equal to two-thirds of their working income, according to a 2004 report by The Pensions Commission but B&CE says this target will not be met if the lack of appropriate saving continues.
B&CE is urging the pensions sector, employers, and trade unions to collaborate and develop a clear set of goals for the UK pension system to address the problem of undersaving.
B&CE director of policy Phil Brown says: “Once Generation X starts to retire in large numbers, the UK could face a retirement savings crisis, with people unable to carry on with anything like their current standard of living.
“While this problem isn’t one that can be solved during the current cost of living crisis, it also shouldn’t be ignored. Government, employers and other stakeholders should look seriously at the UK’s pension framework, to gain consensus on the challenges ahead and set objectives for what sort of outcomes the state pension and workplace savings should look to achieve.
“We would be in a much worse position if it were not for automatic enrolment, which has dramatically increased the number of people saving for retirement over the past decade, but now it’s time to ensure it reaches its full potential.”
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