Are baby boomers really the generation that has it all?
CII/PFS Thinkpiece 105
19 March 2014
04 July 2018
Policy and Public Affairs
Baby boomers are often thought of as a gilded generation, rich in property and reaping the benefits of a once-generous state. However Tony Stenning at BlackRock points out that in fact this group may not be as "asset-heavy" as is typically thought.
Stark realities for resilience in retirement
- With all the housing equity that they are perceived to have, baby boomers are often the last to be considered in discussions on financial resilience. However, BlackRock's Investor Pulse survey paints a surprisingly bleak picture of the 49-68 year-olds in the UK.
- The survey found that 46% of this group have scarcely started to save for their retirement. Other findings suggest that adults in their late 40s-60s are saddled with almost as much debt as young people aged 20-30. Fewer than half own their own home, only a fraction enjoy an income from rental property, and more than 30% fear they will outlive their savings in old age. People are also struggling to take the right steps financially, with nearly 40% spending more time planning holidays than reviewing their savings.
- Equally important is selecting investments enabling long-term growth of retirement pots. One in three baby boomers believe stockpiling cash is the best way to generate an income, and 29% would use the same strategy to grow their savings, neglecting the impact of inflation and low interest rates.
- Another avenue to engage with savers is to revamp the way they are served. There is also a confusion and frustration with the UK Government's constant tinkering with tax and savings rules. Steps should be taken to depoliticise this agenda.
- Professional financial advice can also play a role. The survey suggests that customers are satisfied with the advice they received; and, more importantly, that this advice made them feel more optimistic and in control of their financial future. Asset managers should work with the wider industry to capture these savers and promote the role that advisers can have in growing investors' wealth.
This document is believed to be accurate but is not intended as a basis of knowledge upon which advice can be given. Neither the author (personal or corporate), the CII group, local institute or Society, or any of the officers or employees of those organisations accept any responsibility for any loss occasioned to any person acting or refraining from action as a result of the data or opinions included in this material. Opinions expressed are those of the author or authors and not necessarily those of the CII group, local institutes, or Societies.