Find out more and see a recording of the event here: https://ilcuk.org.uk/report-launch-the-forgotten-generation-retirement-income-prospects-of-generation-x/

1. Slipping between the cracks?
Retirement income prospects for
Generation X
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#GenerationX

2. Welcome from the chair
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Jackie Wells, ILC Associate

3. Welcome and reflections
from Phoenix Group
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Andy Curran, UK CEO for Savings and
Retirement, Phoenix Group

4. Presentation of the report
Sophia Dimitriadis, Research Fellow, ILC
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5. What this presentation will cover
1. Context
2. How prepared Gen Xers are and feel
3. The barriers they face to saving for retirement - including the most
disadvantaged groups
4. The impact of COVID-19
5. Gen Xers’ plans around working in later life
6. Opportunities to support Gen Xers to build up their retirement incomes

6. Gen Xers’ retirement incomes have been affected by a
number of socio-economic changes
The retirement prospects of Gen X
(13.8m people, aged 40 to 55), have
been affected by:
• A shifting pensions policy
landscape - decline in defined benefit
(DB) schemes & introduction of
automatic-enrolment (AE)
• Changing economic trends e.g.,
2008 recession, rise in insecure work,
house prices and rising employment.
0
200
400
600
800
1000
1200
1400
1980 1985 1990 1995 2000 2005 2010 2015 2020
Index
(1980=100)
Year
The development of house prices and
earnings in the UK from 1980 onwards*
UK HPI UK earnings index
GEN X start GEN X end
*Gen X start and end years are based on the average age of a UK
house purchaser born in 1965 and 1980

7. Younger Gen Xers will spend more years in poor
health
• Changing social trends: older parents & having children later
• Changing health trends: living longer and spending more years
in poor health
Some shifts offer opportunities, but many hindered/could hinder
retirement prospects + limited time.
ILC has been exploring the key challenges to saving for retirement
and solutions to address these (via panel discussions + Nat Rep
survey).

8. How prepared is Gen X? While some may be prepared
for retirement,1 in 3 may be very disadvantaged
• Gen X is heterogenous: 44% have DB pension savings & 56% expect
additional non-pension income in retirement.
• …But the majority of the 46% of Gen Xers with defined contribution
pensions are under-contributing.
• Just under 1 in 3 are barely saving enough to achieve a minimum
standard of living & 56% of this group expect no additional (non-
private/state pension) income in retirement.
“We haven't benefited from final salary pensions but were too late for
auto-enrolment. Many of us have huge mortgages, are supporting
children and haven’t had stable careers. We face very grim, late
retirements.”

9. Slightly more Gen Xers are pessimistic vs optimistic, but
some may be sleepwalking into financial hardship
• 40% think they’ll be worse off (vs
40% same/better off)
Are others sleepwalking into hardship?
• 1 in 5 of Gen Xers who expect to not
be worse off are considerably under-
saving.
• 1 in 4 are partly relying on risky
incomes sources
7%
12%
20%
21%
27%
10%
2%
Will you be better off or worse off than your
parents were in retirement?*
Much better off Slightly better off
About the same Slightly worse off
Much worse off Don't know
“I know so many people that…are
dependent on property, but that is
risky.”

10. The majority say they want to save more but are
struggling to do so, mainly due to affordability & debt
“Competing priorities for mortgages/rent, time off work caring for relatives or
supporting children through university… a pension seems like something to
worry about in the future.”
• 1/3 are prioritising
paying off debts
• 50% of Gen X say
they can’t afford to
save more
2%
8%
16%
21%
29%
62%
0% 10% 20% 30% 40% 50% 60% 70%
Paying for adult care
Saving for something other than a house deposit
Financially supporting adult/young children
Ability to work restricted due to health…
Housing costs/saving for a deposit on a property
Not earning enough
Why Gen Xers feel they can't afford to save more
Base equals ‘all Gen Xers who say they can’t afford to save more for retirement’ (50% of all respondents). Percentages may not add up
to 100 as respondents could pick multiple responses

11. Many Gen Xers are overwhelmed with other priorities
“I mean, for me, it's just
time to think about it and
plan for it… I'm trying to
have my mortgage… do
the best for my kids, my
parents are starting to
need care… I feel like a
duck that's paddling as
fast as I can, under the
water, and retirement is
just so low on the list… the
barrier is just making it a
priority.”
10%
16%
19% vs 44% of
the self-
employed
29% vs 38% of
those living with
children
32%
50%
0% 10% 20% 30% 40% 50% 60%
I don't have enough information
I find it difficult to motivate myself
My income & outgoings are insecure
I have too many other priorities
I prioritise paying off debt
I can't afford to save more
The main factors that make it difficult for Gen Xers to save
for retirement

12. Least prepared groups disproportionately struggle to
save – mainly due to affordability & insecurity
Least-prepared sub-
groups for retirement
Group size
(millions)
Key barriers
Renters (private) 1.9 High rental costs. Many younger renters are saving for a home.
Renters (social) 1.5 Poor health limits their ability to work.
Those with low education/
unemployed/ on benefits
3.0/1.1/1.2
Poor health limits their ability to work, & lack of secure, well-paid work
opportunities. Insecure in and outgoings
Those on low incomes 3.0
Same as above - Insecure earnings especially key – many are self-employed.
Many are also not eligible for AE.
Those whose (poor) health
limits their ability to work
2.1
Being limited in their ability to work due to poor health. Insecure earnings -
many are self-employed (often pushed into this).
Carers 1.7
(Adult) care responsibilities limit their ability to work and save, as well as poor
health, which may be a result of providing care.
Self-employed 1.9 Insecure and unpredictable earnings. Aren’t auto-enrolled.

13. COVID-19 is only making things harder – but is increasing
engagement in retirement planning
Since COVID-19:
• 24% of Gen X have been furloughed, had their
hours reduced or been made redundant & 2.6
million (20%) are either spending their
retirement savings or are saving less.
• Disadvantaged groups have been hit hardest.
• But 23% of Gen Xers have more time to
think/are thinking about retirement.
“I lost my job at the start of the crisis and
haven't been able to find work yet, so I am
spending my savings.”
39%
17%
30%
17%
25%
16%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
% of Gen Xers who are eating into their
retirement savings due to the pandemic
“I now feel very vulnerable and once I start earning again, I want to
save as much as possible to build up my pension pot.”

14. To compensate for lower savings, many Gen Xers (37%) are
relying on working past the SPA
BUT 31% aren’t confident they’ll be able to work for as long as they need.
13%
25%
29%
37%
0% 10% 20% 30% 40%
Save more only
Work for longer only
(past the SPA)
Save more
Work for longer (past
the SPA)
What Gen Xers plan to do to address
an expected income shortfall in
retirement
14%
17%
19%
31%
31%
59%
0% 10% 20% 30% 40% 50% 60% 70%
Adult caring responsibliites
Impact of COVID on the
economy
Inadequate skills
Age discrimination
Poor mental health
Poor physical health
What reduces your confidence for working as
long as you need to?

15. What can be done? Need a multi-faceted approach
The government needs to:
1. Address the wider affordability constraints that so many face (structural
solutions beyond pensions system).
2. Improve the pensions system by building on the success of AE to
overcome the well-known ‘inertia to saving’ (overwhelmed generation).
3. Increase Gen Xers’ engagement and awareness of retirement planning by
making information more accessible.
With some Gen Xers retiring in just over a decade – the need to act is urgent.

16. Tackling the wider affordability constraints
1. Tackle the barriers to working for longer
• Increase flexible work opportunities: make all jobs flexible by default
• Support workers in poor health: increase awareness & access of
government Access to Work funds for those with acquired disabilities
• Review the mechanisms for enforcement of discrimination law allow
tribunals to consider cases of multiple types of discrimination
• Boost skills & support unemployed workers: extend the life-time skills
guarantee to all adults & provide targeted back to work support for
workers aged 40+

17. Tackling the wider affordability constraints
2. Make it easier for carers to combine their caring responsibilities with work
Introduce a right to 10 days of paid carers’ leave & up to 6 months unpaid leave.
3. Make renting more affordable and secure, and support first-time buyers
Develop & offer an opt-in tax-incentivised savings vehicle to all employees
through AE, to allow first-time buyers to save for a housing deposit via regular
contributions from pre-tax earnings, while also contributing to a pension.

18. Improving the pension system: building on the success
of AE
More effective if targeted at life stages when Gen Xers have fewer financial
pressures, & financially constrained Gen Xers are given some flexibility.
1. Introduce auto-escalation and commit to phasing in matched employer
contributions.
2. Introduce ‘nudges’ to encourage those who pay off debts to save more
into their pension. E.g., those who pay off a mortgage or student loan
3. Set out a timetable to increase current (employer & employee) default AE
contribution rates
4. Increase access to ‘sidecar’ savings vehicles, including for employees.
• Expand AE to self-employed workers into a traditional pension or a side-
car & auto-enrol those earning below AE threshold into a side-car
scheme.
“…vehicles that enable you to manage when you’ve built up enough rainy-day
money and then save the rest of it…are potentially more effective for the self-
employed.”

19. Making information more accessible
Most Gen Xers want more information on how much to roughly save to achieve their goals
& how to keep track of multiple pension pots. We need to:
1. Make it easier for people to see if their pension savings are on track
• Eventually incorporate ball-park saving levels required to achieve different living
standards in retirement into Pensions Dashboard
2. Increase uptake of guidance (increase awareness & available guidance options)
• Explore ways to increase the awareness & uptake of Pensions Wise guidance. Trial
Pensions Wise guidance sessions for people aged 40+, focused on accumulation.
• Require employers to give new employees information about pension
contributions and how they affect living standards in later life.
3. Increase access to affordable advice
“I can't imagine anyone would think there’s the information out there to be
honest. And I really I don't think that people are being educated about it...”

20. Summary
• While some may be prepared, 1 in 3 are especially under-prepared for retirement
• Many are pessimistic about retirement but others may be sleep-walking into hardship
• The majority want to save more but are held-back by a number of barriers
• Policy makers will need to focus on particularly disadvantaged groups
• What needs to be done:
• Address wider affordability challenges
• Build on the success of AE, but offer some flexibility
• Make information on retirement planning more accessible

21. Lord Hutton of Furness
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22. Rt Hon Jonathan Reynolds
MP
Shadow Secretary of State for Work and
Pensions
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23. Simoney Kyriakou
Senior Editor, FT Adviser
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24. Chris Curry
Director, Pensions Policy Institute (PPI)
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25. Q&A
Please submit your questions to panellists
via the Q&A tab
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26. Closing remarks
Jackie Wells, ILC Associate
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27. Making the extra years count: Inequalities in
disability and dependency with increasing longevity
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@ilcuk
#HealthyYears
Speakers include: Prof Sir Michael Marmot (UCL Institute of Health
Equity), Baroness Young of Old Scone, Prof Sir Muir Gray (Optimal
Ageing Programme), Dr Alison Giles (Public Health England), Prof Les
Mayhew (ILC)
Date: Wednesday, 24 March 2021
Time: 2.00pm – 3.30pm GMT

28. Thank you
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