- Visits to the seaside, meals out in restaurants, gardening and entertaining at home are the top ‘simple pleasures’ Generation X want to enjoy in retirement
- 33% want to prioritise socialising over ‘big ticket’ items and 41% of those who plan to retire have reassessed their retirement priorities in the wake of the pandemic
- But 12 million Gen Xers are in the dark about how much money they will need
- MoneyHelper is encouraging Gen Xers to realise it’s not too late to take action, offering simple steps to help pave the way to a more appetising retirement
Trips to the seaside, pints in the pub and coffees with friends are amongst life’s little joys Generation X crave most for their post-work years, but many could be facing a pension without all the trimmings according to new research from MoneyHelper.
12 million Gen Xers (88%)1 have not calculated how much they will need to live on in retirement and less than a third (29%) have considered the cost of socialising at this stage of their life.
Ahead of Pension Awareness Day on Wednesday 15th September 2021, over 2,000 UK adults aged 40-55 years were asked to take stock of their hopes for retirement. The pandemic has meant of those planning to retire, four in ten (41%) have reassessed their priorities for retirement such as what they will spend their income on, and 33% of Generation X want to prioritise socialising over ‘big ticket’ items and experiences such as holidays. Over two thirds (73%) said spending time with family and friends is more important to them now, and (55%) are making a more conscious effort to socialise with their loved ones.
The simple pleasures Generation X are most looking forward to in retirement are:
- A trip to the seaside (42%)
- A meal out in a nearby restaurant (34%)
- A coffee with friends (33%)
- Gardening (32%)
- Entertaining family and friends at home (28%)
- A drink in their local pub (24%)
However, while those surveyed were most likely to say they want to enjoy a meal out, a coffee with friends and a drink at the pub once a week, they may not be able to afford these things as often as they’d like if they are on track for a ‘moderate’ standard of retirement. The recommended ‘moderate retirement’ budget for eating out is £900 a year2 but Gen Xers would need £1,013 to enjoy the social life they want in retirement – and could have to cut back on six weeks of dining out, or the equivalent of 33 coffees or 9 restaurant meals.3
Research from the International Longevity Centre has shown that just 7% of Generation Xers with a defined contribution pension are saving enough to achieve a moderate lifestyle in retirement.4 This means some could face a watered-down retirement.
According to the findings, four in 10 (39%) 40-55 year olds have been negatively impacted by the economic downturn and effects of Covid-19. More than a quarter (27%) said their retirement pot will likely be smaller due to being furloughed or made redundant during the pandemic, whilst 27% also said they will have to retire later due to the financial impact of Covid-19.
Carolyn Jones, pensions expert at Money and Pensions Service said: “Enjoying life’s little pleasures, like a catch up over a coffee with friends, has become more special than ever in recent months. But our research has served up a less than tasty truth that many of those currently saving for retirement could face having to cut back on the lifestyle they were expecting.
“The important thing is, it’s not too late to take action – and you don’t have to supersize your pension contributions to get back on track. There are simple steps you can take to give your pension a boost, like visiting the MoneyHelper Couch to Financial Fitness website and giving our pensions ‘Money Milestone’ a go, or speaking to our pensions specialists.
“It might feel daunting to think about how much income you need in retirement, but free help is at hand and you might be surprised to find that you’re closer than you think to the retirement you desire, or that there are some simple actions to take now to help you get there. Getting help this Pension Awareness Week means you can literally dine out on your efforts when you do reach retirement.”
Dionne Ferguson, 56 from North-East London says: “I’d never really given my pension a second thought until lockdown. With all the paperwork and specialist terminology, trying to understand it all seemed really overwhelming. It wasn’t until I had more headspace working from home that I was able to invest some time into trying to understand what my retirement might look like.
“After a gentle nudge from my daughter, I reached out to MoneyHelper’s Pension Wise service for support. The lady I spoke with was super friendly and helped me discover pension pots I didn’t even know I had. Sometimes, all it takes is for someone to explain things simply for you to feel empowered to make a change.
“At this moment in time I’m nowhere near understanding how much I will really need for the little pleasures in my later life, or what I should be aiming towards. But, I’m making small, positive changes each day now that I know will help me get there and that’s what’s important. Now I feel like I have control over my pensions and can take ownership of my retirement plans, which is a great improvement from 18 months ago. I’d recommend anyone in their 40s or 50s do the same!”
MoneyHelper offers the following top tips on how to start planning retirement finances:
- Try Couch to Financial Fitness. ‘Couch to Financial Fitness’, available on the MoneyHelper website, coaches people to improve their financial wellbeing week by week, whether they are a complete beginner or getting back on track, in the same way they would their physical or mental health. There is a specialist pensions page to help you plan for the retirement you want.
- Track down your pension pot(s) and check their value. With the average person having 11 jobs in their lifetime, it’s easy to lose track of any pensions you may have had in the past. If you think you’ve lost a workplace pension, the first port of call should be your former employer, or you can contact the provider if you remember the name. If you can’t find details of either, you can contact the government’s Pensions Tracing Service. Once you’ve tracked down your pots, you can check your statements or ask your scheme or provider for an up to date valuation of how much you have saved.
- Think about your living costs in retirement. Draw up a budget for your expected income and spending as early as possible to give yourself a greater sense of control over your situation. MoneyHelper has a free budget planner tool to help you plot this out.
- Think about what age you’d like to retire and when you would want to access your pension savings. For some people, this may not necessarily be at the same time. Some people may have already chosen a retirement age with their provider, but if your circumstances have changed and you plan to retire earlier or later, you may wish to reconsider how your savings are being managed to ensure your money is working hard for you. It’s helpful to also check your retirement income using MoneyHelper’s pension calculator if you’re going through any changes.
This week is Pension Awareness Week, an annual campaign run by Pension Geeks with support from the Department of Work and Pensions (DWP). Pension Awareness Day itself falls on 15 September and is there to inspire people to make the most of their pensions.
The government-backed MoneyHelper is a new single destination providing free money and pensions guidance over the phone, online and face-to-face. It also signposts people to expert and free-of-charge debt advice, if they need it. It brings together the services previously provided by the Money Advice Service, The Pensions Advisory Service and Pension Wise.
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Notes to editors
Censuswide spoke to over 2000 UK adults aged 40-55 years old who aren’t retired or unemployed and not looking for work between 27-31st August 2021
- 12% of UK adults aged 40- 55 said they have calculated how much money they will need in retirement, meaning 88% have not done this. There are 14,013,459 40-55 year olds as of latest ONS data in the UK. 88% of this is 12,331,844
- The Pensions and Lifetime Savings Association Retirement Living Standards (pdf, 597K) recommend a ‘Moderate retirement’ budget for eating out, coffee and takeaways is £75 per person, per month. This equates to £900 a year.
- People who said they wanted to eat a meal out at a restaurant, OR enjoy a coffee with friends, OR have a drink at the local pub were most likely to say they want to do these things once a week in retirement.
The average cost of meal at inexpensive restaurant £12 based on Numbeo data. £12 x 52 weeks in a year = £624 a year / 12 = £52 per month.
The average cost of a high street chain medium latte/cappuccino £3.30 which has been rounded up to £3.50. £3.50 x 52 = £182 / 12 = £15.16 a month.
The average cost of pint of lager £3.88p based on ONS data. Rounded up to £4, £4 x 52 = £208 / 12 = £17.33 a month.
£52 + £15.16 + £17.33 = £84.49 per month on meals out, coffees and drinks. £84.49 x 12 = £1013.88 per year
To calculate how many weeks people would have to cut back:
£1013 / 52 = £19.48 a week
£900 / £19.48 = 46.19 weeks
52 weeks – 46.19 weeks = 5.8 week shortfall
To calculate how many coffees or meals out this shortfall equates to:
£1013.88 – £900 = £113.88 / £3.50 per coffee = 33 coffees
£113.88 / £12 per meal out = 9 meals out
- International Longevity Centre UK, Slipping between the cracks? Retirement income prospects for Generation X
About the Money and Pensions Service
The Money and Pensions Service (MaPS) is here to ensure every person feels more in control of their finances throughout their lives: from pocket money to pensions. When they are, communities are healthier, businesses are more prosperous, the economy benefits and individuals feel better off. MaPS delivers free and impartial money and pensions guidance to the public through MoneyHelper, which recently brought together legacy services the Money Advice Service, The Pensions Advisory Service and Pension Wise.
MaPS is working to make sure the whole of the UK understands that financial, physical and mental health are all deeply connected. MaPS’ role is to connect organisations with the shared purpose of achieving the five goals set out in the UK Strategy for Financial Wellbeing.
MaPS supports innovation so that everyone can use the most effective methods to help people feel more in control of their money, targeted to those most in need and inclusive of people from all backgrounds. MaPS is an arm’s-length body sponsored by the Department for Work and Pensions (DWP).
For further information visit the Money and Pensions Service website www.moneyandpensionsservice.org.uk