Retirement savings ‘inadequate’ for 2 million baby boomers amid pensioner poverty fears | Personal Finance | Finance

Baby boomers are named so as they were the generation born after the Second World War, when there was a significant rise in population size and economic growth. Generally, baby boomers were born between the mid 1940s and 1960s and tomorrow, this generation will hit an important milestone.

According to research from the Equity Release Council, children that were conceived during the VE Day celebrations of May 8, 1945 are turning 75 tomorrow, marking the first decade of retirement for the baby boomer generation.

The Council predicts 562,710 baby boomers will mark their 75th birthday this year, followed by another 720,971 in 2022 based on Office for National Statistics (ONS) data.

Additionally, the UK’s over-75 population is expected to pass six million for the first time next year, growing by 50 percent by 2040 to reach nine million in total.

The Council highlighted that the average life expectancy at birth in 1946 was just 68.9 years and some baby boomers will enjoy two extra decades over their lifetimes thanks to improving living standards, medicine and technology.

READ MORE: State pension warning: Deferred payments may raise income tax bills

Welfare spending on Britain’s pensioner population grew £42billion in real terms from £90billion in 2000/01 to £132billion in 2019/20.

Despite increased real terms spending, 1.9 million pensioners still live in poverty according to the Joseph Rowntree Foundation.

Jim Boyd, the CEO of the Equity Release Council, commented on these findings: “We congratulate the post-second war generation and celebrate their longer lives as a reminder of the huge economic, health and social progress we have all gained from as a nation.

“Many consider baby boomers to be a ‘golden generation’ benefitting from generous final salary pensions, free university education and house price growth which younger age groups are unlikely to enjoy.

Additionally, housing accounts for 45p in every £1 of wealth among households aged 75 to 84 and 53p in every £1 for the over-85s.

However, the Council has found that this wealth may be chipped away in the coming years as younger generations come through and elderly generosity shines through.

This could potentially cause a problem down the line. Mr Boyd said: “We must also recognise the hugely important role our elderly play in our communities as workers, employers, carers, volunteers and taxpayers.

“Many also assist younger generations financially, with a quarter of equity release customers using some of their property wealth to support family to pay off debt or help them onto the housing ladder by providing a ‘living inheritance’.”

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