Generation X are seeing a drop in average pre-tax household income as they near retirement, new research from Just Group has shown.
A survey of more than 3,000 Generation X adults (born between 1965 and 1980) showed a decline in household income as they age. Those aged between 43-48 receive an average £49,625 in income from all sources including wages earned from both them and their partner if they are in a relationship. This drops to £45,410 among those aged 49-53 and falls even further to £42,802 among 54-59 year olds.
Just Group said the decline in pre-tax household income appears to be driven by Generation X either moving to part-time work or out of the workforce altogether as they get older. More than two thirds (69%) of those in the 43-48 age bracket are in full-time employment, falling to 62% among those aged 49-53 and 58% for 54-59 year olds.
Meanwhile, a fifth (20%) of the oldest Generation X age group said they were no longer working, compared to only 14% of 43-48 year olds.
Stephen Lowe, group communications director at Just Group, said: “The key question raised by this trend is whether the older members of Gen X jumped or were they pushed from the labour market? Are they choosing to transition into retirement by reducing hours or leaving work entirely to get a better work-life balance? Or, are they forced out of work into lower paid jobs due to factors like ill-health, redundancy or difficulty finding suitable jobs?
“The latter scenario would raise a serious red flag over their longer-term financial security as it suggests a possibility of reduced pension contributions at a critical phase in their life. Those who find themselves unable to get back into work may be forced to dip into their pension savings early and thereby run the risk of diminished retirement savings.”
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