Baby Boomers are widely considered as the generation who have had everything: free higher education, secure jobs, booming property prices, and generous final salary pensions. Life is considered so cushy for these retirees that the government even launched a consultation to see whether they were being unfairly favoured. However, this rosy picture of life for Boomers neglects the reality for one in three people in this age bracket.
A new study has revealed that 34% of working Baby Boomers - aged 51-70 - are worried they won't have enough money to live on in retirement.
The researchers at Chase De Vere, asked people to rate their level of comfort in retirement, and only a fifth of people were confident they would have enough to live comfortably. Some 46% felt they had enough to live adequately, and the rest were actively concerned about their prospects in retirement.
It's not hard to see why, because the researchers also asked about the last time they increased their pension contributions, and while 13% said 'in the past year', 15% said it was more than three years ago, and 58% said they had never increased their payments.
Patrick Connolly, Certified Financial Planner, Chase de Vere, says: "We are facing a retirement time bomb with people living for longer and not saving enough for their own their futures. Many people think that the 'have it all' Baby Boomer generation are immune from these problems having benefited from secure employment, good quality pensions and huge property price rises. However, while some Baby Boomers have fared very well, this certainly isn't a universal picture."
There are those who were loyal members of final salary schemes that subsequently failed and dramatically reduced payouts. There are also those who fell victim to pension scams, and those who never worked for a company providing a pension scheme - and never considered their prospects for retirement.
Connolly points out: "Time is running out for these people to get their finances on track. If they don't they face the prospect of having to work until much later in life, enduring a frugal existence in retirement or being a financial burden to their families".
For younger age groups this should be ringing alarm bells. If this age group, with all their perceived advantages, are struggling to make ends meet, it should be alarming for younger people who carried student debts, faced unaffordable housing, and face saving for retirement on parsimonious defined contribution schemes.
Their great advantage is that they have youth on their side, and so plenty of time to turn their retirement prospects around if they take action quickly. By increasing their pension payments in their 20s, 30s and 40s, they can reap the rewards of compound interest, so that their pensions grow large enough to offer a decent retirement income, without them having to assign a large proportion of their income to pension payments in later life.
But what do you think? Have you earned a comfortable retirement? And are your retirement prospects due to whether you are a Baby Boomer or Generation X? Let us know in the comments.
How we spend our pensions
How we spend our pensions
Figures from Saga show that the over 50s now account for the majority of money spent by Brits on travel and tourism. They have the time to spare, the money, and they are healthy enough to take on the world.
A poll from Abta found that in the wake of pension freedoms, 35% of people were considering cashing in at least part of their pension to travel. A separate study by Senior Railcard found that pensioners take an average of three holidays a year, plus two weekends away, and 17 day trips.
Research from Senior Railcard found that retirees eat out an average of three times a month. However, one in ten do so more than twice a week, and one in three people said that one of the first things they did when they retired was to go out for lunch with their friends.
Of course, just because retirees want to enjoy themselves, it doesn't mean they are happy to throw money away. The vast majority are keen to eat at lunchtimes, when a fixed lunch menu tends to be cheaper, and canny retirees are skilled at tracking down pensioner special offers too.
Figures from the Office for National Statistics show that on average nearly a fifth of the money spent by people aged 65-74 is on leisure. This includes everything from the cinema and theatre to golfing and gardening. They spent more on this than on food, energy bills and transport.
A report by Canada Life found that retirees are spending £4,279 a year on having fun - that’s more than £1,000 more than they spend on boring essentials, and is a 74% increase over the past ten years. It went on to predict that this trend was set to continue, and that pension freedoms would encourage people to spoil themselves a bit more in retirement
Pensioner property wealth is now over £850 billion, and all these family homes don’t look after themselves. The Senior Railcard survey put home renovations in the top 20 activities people got stuck into on retirement, and figures from ABTA found that almost a third of people who were considering raiding their pension pots under the new pension freedoms planned to spend the cash on their home. This seems like an eminently sensible investment - looking after what is undoubtedly their most valuable asset.
Unsurprisingly, while some pensioners are very well off indeed, others are struggling with debt. Figures from Key Retirement found that the average retiree has £34,000 of debt.
Most of this is mortgage borrowing - in many cases driven up by the number of people who unwittingly signed up to an interest-only mortgage. However, credit cards, overdrafts, and loans are also common. It’s why so many pensioners have used pension freedoms to access enough cash to pay their debts.
The day to day basics are swallowing up their fair share of pensioner cash too. On average, people aged 65-74 spend a third of their weekly income on essentials like food and bills - which is hardly living the high life.
The bank of gran and grandad has become an increasingly vital source of cash for families. According to Key Retirement, of those who release equity from their property, 21% of them use the cash to treat their children and grandchildren. This includes an average of £33,350 to help children get onto the property ladder, £6,000 to buy them a new car, £11,000 on family weddings, and £24,780 giving grandchildren a helping hand.
While retirees are quite rightly spending what they need to enjoy retirement, they are hardly all throwing caution to the wind, buying flash cars and spending the kids' inheritance.
Most expect to have something left over to pass onto their family after their death. Some 69% expect to leave property in their wills, and 75% expect to leave cash - according to Unbiased.co.uk - because while baby boomers know how to have fun - they also know how to save for the future.