Over a fifth (22 per cent) of Generation X have no pension and a further 10 per cent don’t know the retirement savings they have, reveals a study by Dunstan Thomas
More than a fifth (22 per cent) of Generation X have no pension and a further 10 per cent don’t know what kind of retirement savings they have, a survey has revealed.
The Dunstan Thomas study found more than a quarter (27 per cent) of respondents had an auto-enrolled pension, 27 per cent had a defined benefit pension and 12 per cent had a defined contribution scheme.
One fifth, (20 per cent) had a self-invested personal pension or another sort of pension.
Gen X had average pension savings of £159,837, translating to average contributions of £200.60 per month.
Almost a third (29 per cent) had never paid more than the minimum contribution amount into their pension.
Those with a DB pension had an average total pension value of £251,978, more than double the £123,577 average value of those with no exposure to DB.
The average Gen X woman had £117,854 in her pension pot, 38 per cent less than their male counterparts, while their average monthly contributions stood at £139, 45 per cent less than the £253 paid in by the average man.
Two fifths (40 per cent) of all respondents said they were not sure they would ever be able to fully retire, with 36 per cent intending to work beyond their planned retirement age in order to compensate for shortfalls in their savings and 31 per cent willing to be poorer during retirement.
Just over a quarter (26 per cent) planned to increase the amount they saved each month before retirement and 6.3 per cent said they will move abroad to cut their cost of living.
Dunstan Thomas director of retirement strategy, Adrian Boulding, said that it’s worrying that 22 per cent of Gen Xers claim to have no pension whatsoever. Those that have pensions are saving about a quarter of what they need to be to fund even a moderate retirement lifestyle and only five per cent of this group look to be anywhere near on track.
Boulding said that the only surprise then is that this is not already a national scandal as one in four Gen Xers look set to rely totally on the state pension for income in retirement and nearly two thirds resign themselves to working longer than planned or cutting their living costs substantially in retirement.
When asked about their plans in the next five years, 13 per cent of 51-54 year olds planned to use their pension to purchase an annuity, while 7 per cent wanted to access their pension through drawdown and 3 per cent wanted to cash out completely.
Just over one in 10 (11 per cent) didn’t want to decide until nearer retirement, 54 per cent had no plans to touch their pension in the next five years and 12 per cent didn’t know.
The nationwide study of 2,011 39-54 year olds found that almost two thirds (63 per cent) of Gen X members in DB policies were considering whole or partial transfers to DC pensions in order to access some savings from the age of 55.