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Baby boomers in trouble

24 February 2017

Employee research shows retirement struggles for the 'have it all' Baby Boomer generation

We have undertaken one of the largest surveys of private sector employees in the UK and of their retirement plans. The research, conducted by MSS on behalf of Chase de Vere, included surveying a cross section of 500 private sector employees aged 51 to 70, the so called Baby Boomers.
 
This is the generation which is believed to 'have it all'. They are ones who have benefited from job security, quality pension arrangements, free further education and, of course, huge increases in residential property values. While this will be the case for some of this generation, who have undoubtedly done very well, our research shows that it is by no means a universal picture.

  • At what age do you ideally want/expect to retire?

                                                     Want to retire            Expect to retire

51-55 3% 1%
56-60 21% 8%
61-65 39% 32%
66-70 29% 45%
Over 70 8% 13%

 

What is clear is that many Baby Boomers won't be able to retire when they want. From our survey 24% want to retire by age 60 but only 9% think they will be able. At the other end of the age scale, 37% want to continue working past age 66 and yet 58% expect they will have to. 

 

  • Have you worked out how much income you might need to live on, comfortably, in retirement?  
Yes, I have a clear idea 22%
Yes, I have a rough idea 42%
No 36%

 

It is worrying that 36% of Baby Boomers, who in our survey are aged at least 50 and so are likely to be nearing retirement, haven't worked out, even roughly, how much income they might need in retirement. 

 

  • What is your expectation when you retire, taking into account all of your sources of income and savings?
I will have enough to live comfortably 20%
I will have enough to live adequately 46%
I am concerned that I wont have enough to live adequately 34%

 

This is again concerning, Over one-third of the Baby Boomers are worried that they won't have enough to live on adequately when they retire. 

 

  • Are you or your employer currently paying into a workplace scheme for you?  
Yes 72%
No 26%
Don't know 2%

 

More than one quarter of Baby Boomers, who are still working in the private sector, aren't benefiting from contributions into a workplace pension scheme. This is at a time when retirement planning should be a key financial priority.

 

  • When was the last time you made any changes to the funds in which your pension savings are invested? (Question asked only to those who have a pension).
In the last year 12%
In the last 2 years 7%
In the last 3 years 5%
Longer than 3 years ago 13%
I have not made any changes 63%

 

The majority of Baby Boomers haven't changed the investments in their pension. This suggests a possible lack of engagement.

 

  • When is the last time you increased how much you pay into any of your pensions? (Question asked only to those who have a pension).

 

In the last year 13%
In the last 2 years 7%
In the last 3 years 7%
Longer than 3 years ago 15%
I have never increased my payments 58%

  

Even though they are likely to be approaching retirement, the majority of Baby Boomers have never increased the amounts they are paying to any of their pensions.

Patrick Connolly, Certified Financial Planner, Chase de Vere, says:

"We are facing a retirement time bomb with people living for longer and not saving enough for their own their futures.

"Many people think that the 'have it all' Baby Boomer generation are immune from these problems having benefited from secure employment, good quality pensions and huge property price rises. However, while some Baby Boomers have faired very well, this certainly isn't a universal picture.

"So we have a rather depressing picture of many Baby Boomers who don't expect to be able to retire when they want, don't have a clear idea how much income they'll need, are concerned they won't have enough money to live adequately and aren't engaged with their pensions. This is a far cry from the perception of the Baby Boomers as the 'have it all' generation.

"Time is running out for these people to get their finances on track. However, this isn't just an issue for individuals; it could also create big problems for those companies that employ them. With many Baby Boomers being forced to work into later life, employers potentially face having an ageing workforce, which can impact on both productivity and capability. A further concern is their succession planning, which could be thrown into chaos if their employees cannot afford to retire, with the possible leeching of key talent to employers who have less of an issue.

"For both individuals and their employers this isn't a problem for tomorrow, it is a problem for now."