Only half (51%) of UK baby boomers are set to reach their retirement goals, a new report from Vanguard has revealed.
The findings highlight the importance of defined benefit pensions among this generation, with 69% of baby boomers with a DB pension on track for retirement, compared to 28% without one.
Figures from the Office for National Statistics show that 65% of those in their 60s have pension wealth in DB schemes, compared to 25% having wealth in defined contribution schemes. Significantly, for those expecting to receive DB income, Vanguard’s report finds this will make up approximately half of their projected retirement income.
Georgina Yarwood, senior investment strategy analyst at Vanguard Europe, said: “It is concerning that half UK Baby Boomers aren’t on track to meet their retirement goals, given the demographic’s proximity to retirement.
“Planning for retirement can feel complex and overwhelming. However, there are things people in, at or entering retirement can do that will make a difference to their financial situation.”
Vanguard said by working part-time for a few years, those approaching retirement can enhance their financial security, while resetting spending goals can also significantly improve retirement readiness.
Aside from pension wealth, accessing home equity either through downsizing, moving area or equity release can also have an impact, significantly reducing or even eliminating the retirement spending gap.
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