People with birth dates between 1964 and 1979 are labelled ‘Generation X’ and are suffering from a widespread tendency to procrastinate when it comes to putting money aside for retirement, according to the results of a new survey*.
Carried out by YouGov on behalf of Old Mutual Wealth, the research conducted with more than 3,000 adults shows that 90% have not started planning how they will fund their retirement*. Among that large majority, the average age at which people felt they would start planning was 45 – roughly 20 years before they might hope to retire.
Making up a savings gap
While there is strong evidence that most people recognise there is a need to plan, this group have a tendency to delay. But trying to make up a savings gap as you come closer to retirement age can be challenging. This is because you will lose some of the benefits of investing over time. For Generation X, retirement planning is on the ‘to-do’ list for most, but there is a worrying tendency to procrastinate and never get round to it.
Many people want to delay pension saving and leave it for another day. It is easy to see why. Between childcare costs, school fees, travel costs, holidays, repaying the mortgage and all the other costs we face in our 30s and 40s, it can feel that there is simply no money left to save at the end of the month. Instead, some people hope that tomorrow will be better and it will be possible to make up the difference. Unfortunately, that might not be possible for many, and trying to rapidly top-up your pension after years of under-saving is likely to end up more expensive over the long term.
Planning objectively for tomorrow
Planning ahead for retirement is not easy. It is difficult to plan objectively for tomorrow because we are hard-wired to focus on the here and now. Planning what financial resources you will need in the future is difficult, and plotting a path to reach your goals requires professional financial advice. Regardless of the life stage you have arrived at, it is important to receive expert and professional advice on your pension plans and requirements. To discuss your situation, please contact us.
*All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 3,009 adults. Fieldwork was undertaken from 14–22 July 2016. The survey was carried out online. The figures have been weighted and are representative of all UK adults aged 30–45.
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