David Sinclair, chief executive of the International Longevity Centre UK, issued a warning. He’s particularly worried that financial vulnerability among younger generations in the UK is on the rise. As financial pressures mount, it is becoming evident that individuals under 40 are not saving sufficiently for a comfortable retirement. Sinclair’s insights highlight a troubling trend: today’s younger adults will possess fewer assets than their counterparts from a decade ago.
New data from the ONS pegs the average net property wealth of those under 40 at an all-time low. As a result, it dropped from £13,967 in 2010 to £11,450 in 2019, whereas the median net property wealth remained frozen at £0 in both years. Older generations have done quite well during this time. These two age groups have enjoyed the largest dollar gains in their net worth.
This massive decrease in the wealth of younger people is deeply alarming for the future pensioner poverty in Britain. Sinclair emphasized the implications of these findings, stating, “Younger people are already not saving enough to enjoy a decent lifestyle as they age, and our latest analysis shows that younger generations will have even fewer assets available.”
Leading Doug Brown, chief executive of Aviva UK & Ireland Life, conveys the dinging alarm bells of financial strain. He points out that even though all generations are feeling the pressure, young workers are most at risk when it comes to saving for retirement. The danger of this vulnerability lies in how disparate the financial realities are between younger and older generations, leading to a widening intergenerational gap.
In fact, data shows that share of people under 40 has dropped from 50.6% to 49.5% in just the last decade. This demographic shift may further exacerbate the challenges faced by younger individuals as they navigate a landscape of rising living costs and stagnant wages.
Sinclair went on to remind that pensioner poverty is already a marked problem in Britain. Additionally, he cautioned that if steps to better address this issue aren’t taken now, it will only become a larger problem going forward. He stated, “Pensioner poverty is already a significant issue, and it will grow if we don’t act now. We know that future retirees won’t be able to rely on housing wealth, and many will need to spend money on rent into retirement.”
These findings carry important implications for both policymakers and the financial sector. It highlights the need for more holistic approaches that put people of all ages on a path to long-term financial security. To combat these inequities, state and federal government agencies work with private organization partners. Working in tandem, they can both develop sustainable solutions that incentivize and promote retirement savings.
Younger Americans are experiencing increased economic burdens. Experts agree that we have to create a culture of saving and improve our financial literacy. Possible strategies involve improving access to financial education and incentivizing retirement savings plans designed for younger employees.