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Generation X – They Aren’t Saving For Pensions
The cost of living is on the rise and that is changing the way in which people live their lives. Therefore, people are now forfeiting their pensions to have more pay in their bank account each month. So, generation X, which is made up of people in their forties and fifties have left their pension to the last minute. This has meant that they are now ploughing money into their pot in order to make up for lost time.
Studies have suggested that generation X made up 43% of pension savings in 2018. This is a huge increase of 14% from the previous year. As these individuals have been dealing with rising costs as well as having to pay for dependents, they are now only making pensions a priority. While it might seem like a wise move to begin saving later, it more than likely means that your investments will not have sufficient time to grow.
The Financial Conduct Authority has released a white paper that is based around the intergenerational difference. The paper indicated that between 2014 and 2016, people between the ages of 40 and 50 had less total wealth than those people of the same age ten years previously. Therefore, it has to be made clear just what the challenges are the age groups face when it comes to saving for their futures.
People are living a lot longer now and as expectancy increases, so is the need to have money in our pension pots. New financial strategies are being put in place by the baby boomers in order to maintain living standard later on in life while younger people are being affected by house prices, unemployment and debt.
Therefore, it is likely that generation x is going to be stretched financially as they find themselves stuck between helping their older parents later in life while also supporting the younger generation. This leaves them with less money than they can put aside for their pensions.
Essentially, whether you look at the baby boomers, generation x or the millennials, the financial needs of all are changing. Therefore, each generation is facing its own challenges. So, perhaps now is the time to seek professional advice and step back and look at how they could affect our pension in the future. Tomorrow might seem a long way away but in reality, it is closer than we think.