The problem with Generation X

Generation X pension advice

Different age groups attract a variety of labels, often sounding like film titles. However, the problem with Generation X has more to do with money than the movies…

If you were born between 1965 and 1980 you are part of Generation X. To put that into context, this cohort follows the baby boomers (1946 to 1964) and precedes the Millennials (1981 to 1996).

Where finances are concerned, the problem with generation X is that time is running out to get money matters in order.

Do the math(s). The eldest members of this generation are now 55 years of age, and the rest are heading towards that potential retirement age over the next couple of decades.

For those keen to carry on working and not draw any pension income until they reach the current UK state pensionable age, it ranges from 12 to about 28 years left to put plans in place.

Is this age group most at risk?  

Talk about pensions and the conversation is often about the problems younger people will have balancing their budgets over the coming decades. House prices are sky high; many college leavers have student debts and wage rises have been low in recent years.

Getting on the pension ladder let alone the property ladder will be a huge challenge for young people.

However, it is Generation X who will struggle if they do not get their finances in order – and quickly.

In 2019, the Pensions Policy Institute conducted research that concluded that this age group was at greater risk than others of reaching retirement age with insufficient income.  

Put simply, they are running out of time to plan. Without a structured plan of action they run the risk of making decisions that may not give the necessary income to maintain comfortable lifestyles. 

What has affected Generation X?

There are many possible reasons for the issues facing Generation X. The 2008 financial crash heaped pressure on people in terms of mortgage debt and stagnant incomes for many years.

There has also been a decline in private sector defined benefit pension provision. Many schemes have stopped, and many employees missed deadlines to join existing schemes.

Many people from Generation X have been forced to rely on defined contributions schemes. Moreover, because automatic enrolment was introduced when this group was already in their late thirties they will not benefit fully from additional contributions.

In most cases, these pensions will mean much lower incomes during retirement compared to that enjoyed by baby boomers before them.

Approaching retirement – what to do next?

You should never panic. Worrying about investments, future income and retirement can lead to stress. That could affect your overall wellbeing.

Logic Wealth Planning has always adopted a holistic approach to money. We look at the wider picture. Understanding what you want, need, and aspire to is key to how we work with our clients.

Whether you have two, ten or twenty years before you plan to retire, talk to an independent financial adviser to help you map out a route that will give you peace of mind.

Please be aware the value of investments or income from them can fall as well as rise. We are here to help you make informed decisions as you put important things in place for you and your family.

Call us on 0808 1234 321 or email info@logic-wp.com to discuss any aspects of pension planning, investments, and life cover.   

* Logic Wealth Planning provides independent financial advice in Manchester, Bury, Rochdale, Cheshire, and the surrounding area, but not limited to the region.