AXA Wealth pinpoints ‘golden boomerang’ generation
The UK’s babyboomers are turning to a variety of assets to secure their retirement income, with 9% expecting to rely on family support, which may signal the start of a golden boomerang generation, according to research from AXA Wealth.
The research, conducted by YouGov, among UK adults aged 55 and over, looked at the different ways in which people are planning to fund retirement. The findings suggest there is an opportunity for financial advisers to help investors consolidate their assets or pool savings within a family to get the most out of their investments.
The State pension remains one of the most commonly cited sources of retirement income with more than three quarters (78%) of 55 and overs indicating that this plays a significant part in their retirement planning. In contrast, it is worrying to see that just 29% of them referenced personal pension as a part of their retirement plans.
Nick Elphick, managing director, AXA Wealth Specialist Products, said: “How we fund retirement is an issue that is far too important to ignore. We are already seeing the rise of the boomerang generation – young adults who feel they have no option but to return home or rely on their parents for financial assistance. Are we about to see the rise of a ‘golden boomerang generation’, where older people seek financial support from their children in retirement?
“The reliance on the State pension is concerning given that the introduction of the flat rate state pension in 2016 is likely to see many people receiving less than they would under the current system. It also worries me that too many people are under-prepared in providing for their retirement and so few are considering a personal pension.”
Property has long been seen as an informal ‘pension pot’ for many and outright home ownership among over 55s is high. Given this backdrop and the significant value of the underlying asset, it is surprising that just one in 10 (9%) babyboomers cited downsizing the family home as a potential income generator in retirement.
Elphick concluded: “With such high levels of home ownership among the babyboomer generation, it’s surprising that many are underestimating the value of their largest asset and ignoring the role it could play in their retirement funding. Are we seeing an end to the old adage: ‘my property is my pension’? Seeking professional financial advice can assist consumers in getting a better understanding of the value of the different assets they hold and how these can help to contribute to their retirement income.”