Half of state pensioners who are baby boomers are expected to fall short of having an adequate income in retirement, according to research by asset manager Vanguard.
Millions born in these years most likely not to have enough money for retirement
The workers most likely not to have enough money in retirement – and all the ways to get on track – have been revealed.
Half of state pensioners who are baby boomers are expected to fall short of having an adequate income in retirement, according to research by asset manager Vanguard.
Half of the generation born between 1946 and 1964 are expected to fall short of achieving an adequate income in retirement, 62 per cent of high-income baby boomers – earning over £74,600 – have sufficient savings to meet their income goals in retirement.
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Most low-income workers on less than £17,700 a year will be able to maintain their lifestyle due to reliance on the state pension, even though many will fall short of the “minimum” retirement living standard.
Middle-income baby boomers are most at risk of falling short, according to the report. Of these, just four in 10 who earned £32,600 and £46,599 were projected to meet their expected retirement income.
Georgina Yarwood, of Vanguard Europe, said: “Despite common perceptions, many UK baby boomers aren’t as financially secure as assumed, with only around half being retirement ready.
“Middle-income boomers face the greatest shortfall, and without access to generous defined benefit workplace pensions, many risk falling short in retirement. Our findings show that overall, baby boomers with defined benefit pensions are twice as likely to meet their retirement goals than those without.
“Bridging the gap could require some tough choices like tapping into home equity, delaying retirement or cutting back spending.”
Ian Cook, of wealth manager Quilter Cheviot, said: “Although boomers benefitted from house price inflation, many will be forced to downsize and release equity or take out loans to fund their lifestyles in retirement. There’s a perception they are better off but this isn’t always the case.
“A lot of this is down to the switch from defined benefit to defined contribution. It means many people are sleepwalking into retirement without the income they hoped for.”