Mind the gap: Generation X and pension savings
09 April 2026As you would expect, the team at Chapters Financial interacts with a wide range of age groups through our financial planning work. It’s always fascinating, indeed a privilege, to engage with new people and to learn about their personal journey and circumstances in the process of helping them to plan their financial future.
Each individual is exactly that – an individual – with their own unique personal and financial circumstances. However, there are broad trends, issues and circumstances (positive and negative) that apply to each generation, and this applies to pension savings as well as to many other situations.
A good example of this in the UK is the pension savings (or not) of Generation X, who are those born between 1965 and 1980. New research by the Social Market Foundation, sponsored by the Standard Life Centre for the Future of Retirement, indicates that many Generation X individuals are in danger of retiring with too little pension income. Many in this generation have fallen into the gap between two pension systems, having been born too late to benefit from widespread final salary pension schemes of the past, and only being automatically enrolled into workplace pension plans later in their working lives. Stakeholder style pensions were introduced in 2001, but had no compulsory contribution mandate, and therefore, although a good low-cost pension solution, were often overlooked.
There is also the State Pension which should help in an individual’s overall pension provision, and it is worth checking this to ensure that the maximum benefit will be achieved and when it will be available.
The research summary makes interesting reading and may be found here: https://library.standardlife.co.uk/gen-x-pension-shock.pdf
The full publication may be found here: https://www.smf.co.uk/publications/pension-shock/
Chapters Financial is not responsible for the content of external websites.
Some of the key points from the research are as follows:
- Generation X will be the first generation in the UK who are mainly reliant on money purchase / defined contribution pensions for their retirement income
- Over half (54%) of Generation X individuals may be at risk of inadequate retirement income – as the research notes, this is a group of around seven million people who may experience ‘pension shock’
- 15% of Generation X have low pension savings and no other assets such as property or investments / cash savings to rely on, meaning that those in this group may experience severe financial difficulties in retirement
- 57% of this generation have not considered the cost of retirement and may well have an unpleasant surprise when they start planning for their retirement, or they first draw benefits
- Half of those affected fell that they are responsible for the amount they’ve saved into pensions; however, those experiencing ‘pension shock’ also often blame government, employers and the economy for their difficult financial situation
The issue of inadequate pension savings is of course not confined to one generation. However, with Generation X falling firmly in the gap between the end of final salary pensions and the beginning of auto-enrolment, and with this generation fast approaching retirement, there is a pressing need for action. Some people feel that they have ‘ticked the box’ of pension funding by being a member of an employer’s auto-enrolment scheme. It is good that both they and their employer are contributing to a pension; however, the contribution levels are usually fairly low, so the outcome might be disappointing.
If you would like to review your pension planning to check whether you’re on track for the retirement you would like, please do contact the team at Chapters Financial.
No individual advice is provided during the course of this blog.
Keith Churchouse FPFS
Director
CFP Chartered FCSI
Chartered Financial Planner
Chapters Financial Limited is authorised and regulated by the Financial Conduct Authority, number 402899
