Britain heading for pensions disaster — with people born between 1965 and 1980 worst off
Britons born between 1965 and 1980 are facing the bleakest retirement prospects of any generation, according to a stark new report from the Pensions Commission.The Labour-backed inquiry found Generation X is particularly vulnerable to inadequate retirement savings, with more than one in seven expected to retire without enough income to cover basic living costs.The report estimates 15 per cent of people within the age group will fail to meet what the commission describes as a "minimum retirement living standard".That standard refers to having enough income to cover essential bills while also affording modest extras such as an occasional meal out or a low-cost UK holiday.Across Britain, the commission warned that around 15 million working-age adults are currently failing to save enough into their pension pots.The report argues Gen X has been left disadvantaged because it fell between two very different pension systems.Many baby boomers benefited from generous final salary pension schemes, which provided guaranteed retirement incomes linked to earnings.However, most of those schemes have now closed and many Gen X workers missed out on building substantial benefits through them.At the same time, younger workers have benefited from automatic enrolment rules introduced in 2012, which require employers to provide workplace pension schemes.Generation X facing worst retirement outlook as pensions report warns millions are undersaving | GETTYThe policy helped younger generations begin pension saving earlier in their careers.Gen X workers were also slower to build savings through defined contribution pensions, which gradually replaced final salary schemes across much of the private sector.The commission warned that even if many middle-aged workers increase pension contributions now, there may be limited time left for the additional savings to significantly improve retirement outcomes.The report stated: "Given Generation X are currently in their 40s and 50s, efforts to address levels of inadequate defined contribution savings in the coming years will have less impact on them than subsequent generations."Workplace pension pots are being forgotten | GETTYSteve Webb said Gen X had effectively become trapped between the decline of traditional pensions and the rise of newer workplace saving schemes."Gen X are caught in the middle, having largely missed out on final salary pensions but not yet built up significant new-style 'pot of money' pension wealth," Mr Webb said."It is as if the final salary tide has gone out, but the cavalry of new workplace pensions is barely visible on the horizon."The report suggested younger generations currently face a comparatively stronger retirement outlook.Around 10 per cent of Generation Z, defined as those born between 1997 and 2012, are projected to fall below the minimum retirement standard.Among Millennials, born between 1981 and 1996, the figure rises slightly to 11 per cent.The commission stressed that the minimum retirement standard remains relatively modest and does not represent a luxurious lifestyle.Instead, it covers basic financial security alongside occasional affordable leisure activities such as a monthly restaurant meal or a self-catering break within the UK.The Pensions Commission said further reports outlining proposals to tackle the retirement savings crisis will be published in the coming months.
