Less than half (43.1 per cent) of Baby Boomer households aged below 65 are meeting the PLSA’s target for a moderate retirement income, research from Hargreaves Lansdown has revealed.
The survey from the Hargreaves Lansdown Savings and Resilience Barometer found that whilst the majority of baby boomer households are not meeting PLSA’s requirements, they are doing better than UK average of 42.6 per cent.
It also found that a higher proportion of Generation X were meeting the PLSA’s requirements (46.9 per cent).
Hargreaves Lansdown noted that the PLSA standards state a single person would need a retirement income of £20,800 per year to achieve a moderate standard of living, while a couple would need £30,600.
In response to the research, Hargreaves Lansdown senior pensions and retirement analyst, Helen Morrissey, warned that the increase in energy bills could derail people’s retirement planning and could lead many older workers to delay retirement.
Hargreaves Lansdown also found that baby boomer households have an issue when it comes to surplus income at the end of the month as only 46.6 per cent had adequate income left every month, below the 50.5 per cent average and the 54.9 per cent of Generation X households.
Morrisey commented: “There is a lot of discussion about how the Baby Boomer generation have a better financial deal than those who came after them.
“They are more likely to retire with a final salary pension and to have benefited from the enormous house price inflation we have seen over the years. Many are sitting on a great deal of wealth.”
Morrissey went on to warn that it wasn’t the case for everyone, as many have retired with generous pensions but given that they have worked the majority of their careers in the pre-auto-enrolment world there are also those facing retirement with little, if any, pension wealth.
“Similarly, when it comes to home ownership – not everyone has been able to get on the housing ladder and so go through retirement either still paying off a mortgage or needing to find money for rent – it’s an enormous expense that really affects overall financial resilience,” Morrissey continued.
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