Generation X faces retirement squeeze with smaller pensions than parents

Generation X risks becoming the first cohort to retire with less financial security than their parents, as new research lays bare the fragility of their pension savings.

PensionBee’s 2025 Pension Landscape report shows that savers over 50 are entering retirement with worryingly modest pots. Women have on average just £30,644 saved, compared with £54,512 for men, underlining both the gender pension gap and the scale of the challenge facing this generation.

The firm’s Retirement Confidence Index finds that Gen X – those born between the mid-1960s and early 1980s – is the least prepared for later life of any age group. The findings raise the prospect that this so-called “forgotten generation” will enjoy far less financial resilience than their predecessors.

HISTORICAL DISADVANTAGES

Part of the difficulty lies in timing. Many Gen Xers entered the jobs market during downturns and endured stagnant wages before being hit by successive economic shocks, from the dot-com crash and the global financial crisis to the Covid-19 pandemic, which disrupted saving during their peak earning years.

In addition, this group has become the backbone of the “Sandwich Generation”, supporting both ageing parents and adult children still financially dependent. Costs such as university fees, care bills and mortgages often eclipse pension contributions, leaving retirement planning on the back foot.

PROPERTY WEALTH NOT ENOUGH

While some hold significant property wealth, this is unlikely to fully offset the lack of dedicated retirement savings. Without targeted action, PensionBee warns, Gen X faces entering retirement without the resources needed to sustain living standards.

Maike Currie, vp of personal finance at PensionBee, said: “Generation X has been squeezed from every angle, sandwiched between caring for ageing parents and supporting children, all while weathering repeated economic shocks.

“It’s little wonder that pensions have slipped down their priority list. But the reality is that this generation is heading towards retirement with far less financial security than their parents enjoyed.

“Unless we act now, Gen X could become the first generation to retire worse off than the one before. That should be a wake-up call for policymakers and the industry to provide the tools, support and flexibility this overlooked generation urgently needs.”