Generation X largely overlooked with regard to their long-term financial needs

Much has been written about generations in the workplace, but members of Generation X have been largely overlooked with regard to their long-term financial needs. Findings contained in a recent report from the International Longevity Centre and supported by Standard Life titled ‘Slipping between the cracks’[1], show why many people in Generation X (those born between 1965 and 1980) continue to be “Generation Vexed”.

Generation X employees are in prime earning mode, however this report shows they aren’t saving for retirement like previous generations. A third of Gen Xers are not confident they’ll be able to work for as long as they need to fund their retirement. Worryingly 37% of Gen Xers plan to work past the state pension age (SPA) to plug a retirement income shortfall and one in three (31%) are not confident they will be able to work for as long as they need.

Limiting employee retirement finances

Gen Xers are also concerned poor physical health (59%), poor mental health (31%) and age discrimination (31%) could prevent them working in later life, limiting their retirement finances. The reality is one in three (31%) of Generation X members do not feel confident they will be able to work for as long as they need to fund their retirement needs, due to concerns around health and age.

Other concerns include not having the right skills to adapt to the changing job market (19%) and a fear the economic impact of the COVID-19 pandemic will make it harder to remain in work (17%). Meanwhile, almost two-thirds (62%) of those who plan to work past the SPA to address an income shortfall in retirement are confident they’ll be able to do so – but they may find this is not always possible as a quarter (25%) of this group currently have a health problem or disability, and some (7%) expect to provide care to an adult in the next five years.

Financial learning and wellbeing programmes

Many Gen-Xers feel they’ll never retire and expect to continue working to have an income in later life. Others want to work but fear discrimination or face health barriers. Flexible working and lifelong learning can help employees continue to stay in the workforce and save for longer while access to financial learning and wellbeing programmes can also help ensure everyone is equipped with the knowledge they need for later in life.
Providing more support to workers in poor health will likely make the biggest difference – followed by tackling age discrimination. In a YouGov survey more than one in five (21%)[2] Gen Xers said an invitation from their employer to a free guidance session would help increase their awareness about retirement planning and other issues concerning them.

Employer opportunities at key life transition points

This option was particularly popular among Gen Xers who expected to become carers to loved ones or relatives. It was also popular among Gen Xers who said looking for a new job or recently changing jobs was a reason for not contributing more to their pension plan. Some employers already conduct reviews that enable employees in their 40s, 50s and 60s to assess their health, skills and finance.

However, there may be other opportunities at key life transition points for employers to engage employees in retirement planning – such as when employees start a new job, or are promoted. Addressing information gaps may therefore help more Gen Xers to save adequately for retirement. It might also help to improve an employees’ perception of their employer as a trusted guide on retirement matters.

Trusted to supply retirement planning information

When Gen Xers were asked who they trusted to supply retirement planning information, government-approved organisations came out top (47%). They were followed by financial advisers (30%), then family (25%).

Employers only came seventh (17%), below “bank or building society” (19%). This suggests there is a real opportunity for many employers to add further value to their employees’ retirement planning.

Source data:
[1] All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 6,035 adults aged 40 to
55. Fieldwork was undertaken between 13th – 24th November 2020. The figures have been weighted and are representative of all UK adults aged 40-55. Calculations based on survey stats calculated by the International Longevity Centre. All references and methods are available in the full report, which can be downloaded here: https://ilcuk.org.uk/slipping-between-the-cracks/
[2] The report draws on analysis of a nationally representative YouGov survey of 6,035 Gen Xers, which was carried out over the period 13–24 November 2020. This analysis was supplemented with panel discussions and
a qualitative survey with a smaller number of Gen Xers, which explored their attitudes and perspectives. Previously published data and literature was also drawn upon.