A report on pensions and other savings from wealth manager Brewin Dolphin, revealed that Britain’s 45 to 54-year-olds are trying to address the triple whammy of financial challenges posed by their children, their ageing parents and saving for their own retirement.
In the report, The Big Squeeze: Part Two of the Brewin Dolphin Family Wealth Report, this generation may earn the most but it saves less than any other age group.
The financial effect of small sacrifices made now could be multiplied in a pension over a 20-year term, thanks to potential investment growth.Liz Alley
According to the study, this group faces a substantial pensions shortfall of £370,000 and 64 per cent of them – equivalent to six million people – classify themselves as only getting by, making ends meet or struggling.
Even those in higher income households were feeling the strain, with more than one-third (36 per cent) of households with incomes between £70,000 and £100,000 classifying themselves in the same way.
Roadway to retirement is running out: with an average of only 180 pay days left to retirement, 45-54 year olds in the UK still face an average pensions shortfall of £370,000.
Their children face a potential 30-year debt burden: Going to university means that many are starting their working lives £54,000 in debt and could spend the next 30 years paying it back, instead of saving for a house deposit.
Inheritances at risk: 22 per cent of this age group is relying on an inheritance, but greater longevity means these could be eaten up by future care costs.
Produced jointly with think-tank the Centre for Economics and Business research, the study incorporated the views of 11,000 adults in the UK.
It also found that 30 per cent of the 'Sandwich Generation' has not been saving anything, and a fifth said they are putting away less than 5 per cent of their net income each month.
According to the research, almost two-thirds of those who felt they were not putting enough money away for retirement said they simply had no spare cash to save.
Meanwhile, they were paying for their children's education and long-term care for their parents, putting additional financial pressure on them, the research revealed.
Liz Alley, divisional director of financial planning at Brewin Dolphin, said: "It’s no wonder the majority of this age group are feeling a big squeeze.
"These 45 to 54-year-olds are in the perfect financial storm, facing the combined pressure of providing for their children, caring for their ageing parents, and trying to achieve their own career and retirement ambitions."