• 59% of those with insufficient savings don’t have any other sources of income 
  • 60% of Gen Xers with a Defined Contribution (DC) pension aren’t contributing enough for financial security and flexibility later in life
  • Just over a quarter of Gen Xers [28%] are mostly relying on the state pension to fund retirement or don’t have any pension savings at all

Nearly one in three Generation X members (those born between 1965 and 1980) face financial hardship in retirement due to having inadequate pension savings, and run the risk of only achieving a minimum or lower than minimum standard of living in retirement as a result.

Worryingly, the majority of this group (59%) also don’t have any additional income from other sources, such as property, to support them later in life.

The findings are contained in Slipping between the cracks, a report from the International Longevity Centre and supported by Standard Life, part of Phoenix Group.

Gen X DC pension contributions also falling short
The report also reveals the majority (60%) of Gen Xers who have a defined contribution pension are contributing too little to their pot to achieve even a modest income in retirement:

  • Over two-fifths (44%) have gaps of at least 10 years in their contributions – this rises to 48% of women
  • 17% don’t even know how much they’re contributing
  • Less than a fifth (18%) are not paying in enough to achieve a modest2 lifestyle
  • Only 7% are saving enough for a moderate3 lifestyle in retirement.

This assumes that an individual with a DC pension must save 11% of their earnings to achieve a modest income in retirement if their employer contributes 5% of earnings.

Alternative income streams
Positively, almost a quarter of Gen Xers (23%) expect to have other sources of wealth as their main income in retirement. The majority (56%) of this group expect to rely on one of the following:

  • Other savings and investments excluding property (26%)
  • An inheritance (25%)
  • Downsizing or releasing equity from the property they live in (23%)
  • Support from a partner or family member (14%) 
  • Other property investments (11%)

However, more than a quarter (28%) of Gen Xers will mostly or solely rely on the state pension to fund their retirement, or don’t have any pension savings at all.

Andy Curran, CEO of Standard Life, part of Phoenix Group, said: “Many Generation Xers don’t have adequate pension savings in place, and sadly face financial vulnerability in retirement. Many entered the job market too late to take full advantage of final salary pensions, yet too early to enjoy the full benefits of initiatives like auto-enrolment, and their retirement income will be stretched as a result.

“To address this, we would encourage employers to consider mid-life MOTs, to help people take stock of their finances and support them with planning for later life. At the same time, we’d also urge Gen Xers to regularly review their annual spending and engage with their finances as early as possible to gain a better understanding of what they’ll need in the future and so being better placed to take the necessary steps to achieve a more comfortable retirement.”

Sophia Dimitriadis, Research Fellow at ILC and report author added: “There’s still time to support the retirement prospects of Generation X and alter their current trajectory. But with the oldest members of this generation retiring in just over a decade, we will need to act fast. The majority of people with DC pension savings are chronically under-saving, and with many Gen Xers too overwhelmed with other priorities – like caring responsibilities and the additional pressures from the pandemic – it is vital that the Government builds on the success of auto-enrolment to support people to reach an adequate retirement. With many Gen Xers facing often temporary financial pressures – the most effective solutions will offer some flexibility and tap into moments when people have a bit more money.

“Increasing minimum pension contributions is clearly vital, but it’s important we include an element of flexibility by allowing people to temporarily pay into their pensions at a lower rate if they are really struggling financially. We can also prompt people to save more once they’ve paid off large debts – such as once they’ve paid off their mortgage or student debt, and automatically increase pension contributions when people receive a pay rise, or after a number of years of pension contributions. The government can also introduce a flat-rate 30% tax relief to enhance the pension pots of low earners, many of whom are struggling to afford to save more for retirement.

“In the meantime, we urge Gen Xers to play their part by trying to capitalise on moments where they can afford to save more – such as following a pay rise or a decrease in mortgage payments to increase their pension contributions. They will also need to take stock of their finances, using recent guidance created by the Institute of Actuaries, to see if their current pension contributions will be sufficient for them to lead the lifestyle they want in retirement.”



Sarah Muir
07870 537937

Rachel Esland
Phoenix Group
078927 05093

Darragh Leeson
Phoenix Group
07707 270001

Liam Hanson
+44 (0) 208 638 0832

Notes to Editors

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 survey was carried out online. The figures have been weighted and are representative of all UK adults aged 40-55. Calculations based on survey stats calculated by ILC. All references and methods are available in the full report, which can be downloaded here: https://ilcuk.org.uk/slipping-between-the-cracks/

2 - Modest standard of living: This is between a minimum and a moderate standard of living. The contribution level estimated necessary to achieve this is 16% (likely a combination of employee and employer contributions).

3 - Moderate standard of living: This provides some level of freedom and resilience to shocks. The contribution level estimated necessary to achieve this is 21.3% (likely a combination of employee and employer contributions).

About Standard Life 

  • Standard Life is a brand that has been trusted to look after peoples’ life savings for nearly 200 years 
  • Today it proudly serves millions of customers who come to Standard Life directly, through advisers and through their employers’ pension scheme.
  • Standard Life is part of the Phoenix Group, the largest long-term savings and retirement business in the UK. We’re proud to be building on nearly 200 years of Standard Life heritage together
  • Our products include a variety of Pensions, Bonds and Retirement options to suit people’s needs, helping our customers to invest and save for their future. We’re proud to offer a leading range of sustainable and responsible investment options.
  • We support our customers on their journey to and through retirement with comprehensive, easy-to-understand guidance so they can invest in the right way for their needs, and plan a future they feel confident about.
  • The value of investments can go down as well as up, and may be worth less than originally invested. 

About ILC

  • The ILC is the UK’s specialist think tank on the impact of longevity on society, and what happens next. The International Longevity Centre UK was established in 1997 as one of the members of the International Longevity Centre Global Alliance, an international network on longevity.
  • Since our inception, we have published over 250 reports, organised over 300 events including the annual Future of Ageing conference. We work with central government, local government, the private sector, and professional and academic associations to provoke conversations and pioneer solutions for a society where everyone can thrive, regardless of age.

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