Gen X: Securing retirement when you’re squeezed
Aged between 45 and 60? Got a big retirement dream? You’re a typical Generation X!
Perhaps your retirement dream looks like this: going out with friends regularly, lots of travel, a new car, or simply enjoying your home and your family without any financial worries.
But the reality may be far less idyllic. According to a 2024 report from Barnett Waddingham, 53% of Generation X believe they’ll retire in comfort. Yet only 12% of them had planned sufficiently to make that dream a reality.
The dream may quickly become a nightmare.
A Generation X ‘sandwich’
Some Gen Xers in the Isle of Man must feel like they’re the filling in a retirement issue sandwich! They’re being squeezed from both sides:
- Rising costs of living are putting pressure on their disposable income, and stagnant wages limit their ability to put aside more.
- Many are supporting elderly parents while also helping children through higher education, or having to support children living at home.
To put that last point in perspective: the Higher Education Policy Institute reported recently that it costs around £15,000 per year to support a child at university with a minimum acceptable standard of living – and that’s before factoring in the costs of getting on and off the Island.
Despite these challenges, it’s not too late for Generation X to make meaningful progress toward retirement security. Here are some practical steps to get you started in building a resilient pension plan.
Seek advice from a qualified Financial Advisor
A qualified advisor can help create a plan tailored to your ambitions for retirement, factoring in your family commitments and your intended date for retirement.
Don’t rely solely on the State Pension
State pensions should not be treated as your main source of retirement income. Think of it more as a supplement.
Boost Pension Contributions
If you are paying into an existing pension scheme, perhaps offered by your employer, look at the possibility of increasing your contributions. You can speak to the provider to get a pension statement and find out how much retirement income you’re currently on track to get. Isle of Man residents can contribute up to £50,000 per tax year to a pension (must be an Isle of Man-based pension), and pension contributions also benefit from tax relief.
Tackle existing financial pressures
If your budget is already stretched, start by tackling high-interest debt. Downsizing your home or reducing discretionary spending can free up cash for pension contributions, especially important if you’re supporting both children and elderly relatives.
In short? Seek some independent expert advice
For Generation X in the Isle of Man, retirement for some might feel like it’s far away. But the window for building a healthy pension pot for you to benefit from in later life is getting smaller. Every pound you invest now means that it has more time to grow, so getting some great advice today will help give you the best chance of a successful future.
That’s why it’s never too late to seek advice from an independent financial adviser.
The team at Blackford Financial Services will be delighted to speak to you.
We offer a free initial consultation to help answer any questions you have on pensions. We have offices around the Isle of Man in Douglas, Port Erin, and Ramsey.
Licensed by the Isle of Man Financial Services Authority
Important information: This article does not constitute financial advice. Eligibility for protection products is subject to underwriting. Terms and conditions apply.