Generation Xers living in London, aged 40-55 today, are twice as likely to hold Buy-to-Let (B2L) residential properties as an investment than the national average. Twelve per cent of London’s Gen Xers own at least one B2L property, whereas nationally just six per cent of 40-55 year olds own a B2L property.
This higher exposure to B2L has a positive impact on the value of London-based Gen Xers overall non-pensions savings levels: on average they have saved £138,021 so far, nearly double the national average value of non-pension investments for this age group of £71,591 (amongst those who have savings and investments). In some parts of Britain more than a third of Gen Xers have no savings whatsoever.
London’s Gen Xers are also nearly twice as likely to own shares in specific listed businesses (rather than in funds). Nearly one in every ten (nine per cent) Londoners aged 40 to 55 today hold individual listed shares as an investment, whereas the national average is only five per cent.
Average pension savings of London’s Gen Xers totals £223,790 and, on average, they put £319.30 each month in to their pension. This is nearly 30 per cent higher than the national average amongst this age group which is £159,837. The average monthly pension contribution of 40 to 55 year olds nationwide stands at just £200.60.
London-based Gen Xers hold total pensions, investment, and savings worth £361,811, which is 36 per cent higher than the national average. However despite these relatively positive numbers for Londoners in Generation X, the ‘Exploring the Retirement Prospects of Generation X’ consumer study published this week by pensions technology company Dunstan Thomas, finds that most Gen Xers, even those living in London, are setting aside nowhere near enough to retire in their 60s.
Adrian Boulding, Director of Retirement Strategy at Dunstan Thomas commented: “It’s clear from this study, that despite Londoners proving to be more adept at saving than the rest of the country, only seven per cent of Gen Xers living in London are saving enough to retire modestly in their mid-60s.”
According to the Institute and Faculty of Actuaries (IFoA) paper, building on the Pensions and Lifetime Savings Association’s (PLSA) Retirement Living Standards, Londoners will need to budget at least £24,100 per year if they plan to stay living in the capital and enjoy a moderate retirement lifestyle.
Adrian Boulding of Dunstan Thomas added:
“Our study found only seven per cent of London’s Gen Xers were putting in more than £1,000 per month which is roughly what the IFoA study, recommends for building a pot big enough for Londoners to fund a moderate retirement lifestyle from State Pension age.
“The IFoA calculated that those on average incomes living in London need to be setting aside £1,090 per month to afford a ‘moderate retirement lifestyle’ from State Pension age. The new Dunstan Thomas study finds only a small minority of Londoners saving enough to retire conventionally. But this does not spell poverty. Our analysis of all the findings and interviews we conducted across the country shows that Generation X are set to lead a reinvention of the nature of retirement as ‘flexi-retirement’ becomes a lifestyle choice for many within the next 10 years.”