Many in ‘Generation X’ (those born between 1965-1980) could face a financial cliff-edge in their retirement, with 54 per cent having inadequate savings, and 15 per cent having no housing equity or investments to fall back on, according to a report by the Social Market Foundation.
The research, sponsored by the Standard Life Centre for the Future of Retirement and undertaken by Survation, found that of the 2,000 respondents, 39 per cent were projected fall short of maintaining their current standard of living in retirement.
In addition, 35 percent of respondents could fall below minimum retirement living standards at current rates of saving.
The report estimated that this generation of savers may have had more limited access to traditional DB schemes, but are also too old to build up significant savings through automatic enrolment, which was introduced in 2012.
The research also suggests many workers are unaware of the scale of the problem. Around half of Gen X respondents expected a higher retirement income than current projections suggest. When informed about their likely retirement finances, 16 per cent said they would cut spending on essentials such as food, energy or transport to increase savings.
Gideon Salutin, chief economist at the Social Market Foundation, said: “This (Gen X) generation now approaching retirement forms a slow-moving avalanche. Millions are heading for a retirement without the income they expect. Without action, their retirements will be meagre.”
Nearly half of Gen X in the North East (49 per cent) are projected to fall below minimum retirement living standards, compared with 26 per cent in the South East.
Women, renters, those who have divorced, people with long-term health conditions and ethnic minority groups were also more likely to be affected, according to the study.