Generation X risk sleepwalking into an inadequate retirement, despite higher exposure to property than their predecessors, warns Rathbones.
Nearly twice as many Gen X – those born between 1965 and 1980 – own buy-to-let homes as Baby Boomers (17% vs 9%) yet face a more precarious future.
The Pensions Commission’s recent interim report on the state of retirement saving in the UK identified Gen X as one of the most at-risk cohorts, with many entering the workforce as defined benefit pensions were disappearing with fewer employers offering workplace schemes and before the introduction of automatic enrolment.
Furthermore, Gen X (66%) were also less likely to hold tax-efficient investments such as ISAs than Baby Boomers (78%) or other investment accounts (45% vs 52%).
Rebecca Williams, financial planning divisional lead at Rathbones, said: “Many Gen Xers are sleepwalking into retirement with far less financial security than their parents. They came of age as defined benefit pensions were disappearing and have since faced years of stagnant wage growth and repeated financial shocks, making it harder to build robust, long‑term savings.
“This cohort also represents a large part of the ‘sandwich generation’, juggling day‑to‑day costs while supporting both ageing parents and children. As a result, boosting retirement savings can be difficult amid ongoing financial pressures.
“It’s perhaps no surprise that property – particularly buy‑to‑let – has been seen as an alternative route to funding retirement. But relying on property as a pension can leave retirees overly exposed to a single, illiquid asset at a time when flexibility is most needed.”
Rathbone’s research suggests that conditions that drove strong property returns in previous decades have already shifted. Between 1980 and 2016, UK house prices rose by around 6.7% a year. However, since 2016, UK house prices have risen by just 3.7% annually, barely keeping pace with inflation while London property has underperformed, rising by just 1.3% a year.
Isabella Galliers-Pratt, senior investment director at Rathbones, commented: “The conditions that fuelled the property boom have long since changed. Property is less flexible than pensions or investments, and rental income can be less predictable. The idea that property is always a ‘safe bet’ no longer holds true in many parts of the country.
“By contrast, pensions benefit from upfront tax relief, tax‑efficient growth and access to diversified investments, making them a more structured and effective way to build long‑term retirement income. A more resilient approach typically involves balancing different asset classes, ensuring pensions, investments and property work together to meet income needs and align with personal risk tolerance.”
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