People born in the 1960s and 1970s will generally be no better off in retirement than their predecessors, the Institute for Fiscal Studies has revealed.
According to a report published today, successive retirement cohorts have had higher incomes and higher living standards than the previous since the Second World War, having benefited from a rising national income.
However, the cohort of people born in the ‘60s and ‘70s will be among the first to retire significantly better-off than those born a decade earlier.
This is owing to them having no higher take-home income, not having saved significantly more of what income they did have, being less likely to own a home, generally having lower private pension wealth and tending to find that state pensions replace a smaller proportion of previous earnings.
Those born in the ‘60s and ‘70s did have higher incomes during early adulthood than their predecessors. But this additional income at younger ages relative to earlier generations was all spent: they have not saved any more past income than their predecessors had by the same stage in life.
Although the IFS pointed out that those born in that period are likely due to receive more from inheritances, it warned that expected inheritances are unevenly distributed, with those who are already wealthiest expect to receive the most inheritance in future.
