Pensions - Articles - Generation veXed solving the retirement puzzle


The Pensions Policy Institute (PPI) is today publishing Generation veXed: solving the retirement puzzle. This report, sponsored by Phoenix Group, explores the financial wellness of Baby Boomers, Generation X and Millennials, the risks they face in later life and how policy, industry and employer interventions could mitigate risk.

 Daniela Silcock, Head of Policy Research at the PPI said “The decline in Defined Benefit (DB) provision, reductions to the proportion of State Pension people will receive, and an increased likelihood of renting, indebtedness and giving or receiving care in retirement mean members of Generation X are at greater risk of reaching retirement with an income that is not adequate, or sufficiently sustainable or flexible.”

 “While Generation X, will be reaching State Pension age over the next 12 to 28 years, there is still scope for Government, industry and employers to take collective action to help mitigate risks. The Government could consider whether benefits could be restructured to ensure that those renting in retirement don’t lose out on means-tested benefits, such as Housing Benefit, reducing both the incentive to save and disposable income in retirement.”

 “Industry could help mitigate the risk of reaching retirement with less income that increases with an inflationary index and pays out until death. Products which combine sustainability and flexibility (which appeals to consumers) such as a drawdown and annuity hybrid product, could reduce the sustainable retirement income gap.”

 “Employers could support those who need to provide care, or develop health problems, to continue working and contributing to their pensions by allowing flexible working, encouraging shared parental leave, and providing retraining opportunities for workers who need a more sedentary position as they age.”

 “While individuals may need to take more responsibility for ensuring that they are fully prepared for retirement, Government, industry and employers will each play a critical role in ensuring that the future system provides individuals with all of the tools they need to secure a suitable retirement income.” 

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