The Twilight Generation

Five years ago I identified a cohort of older people I called the Charmed Generation. A combination of final salary personal pensions, house price inflation, lack of debt and inherited money from their parents has insulated these people from the financial trauma that has afflicted their children and grandchildren and many of their peers.

Over the past year the financial plight of a slightly younger group of older people has hit the headlines of the mass media.

We are going to hear a lot more about this group so let’s give them a name – the Twilight Generation.

Aged in their 50s they lack savings and pension assets. They probably are property owners but likely to still be paying mortgage. They face the end of their working life – or have already reached that position – totally unprepared for funding their lifestyle in the 60s, 70s and 80s. Fortunately, most of them do not realise just how bad things are and how little they can do to improve their situation.

You must always be suspicious of research from financial institutions since it invariably results in a slew of conclusions that just happen to require the products they sell.

Having said that the recent pronouncement of Aviva, LV and most importantly MetLife Europe are all saying the same sort of things:

• 4.5 million over-50s expect to work past retirement age
• One in five (4.3 million) over-50s had retired but have since gone back into work
• The average pension fund of working adults aged 50-plus is £51,200. The average man has £68,800 while the average woman has £34,500.

What is the relative size of the Charmed and Twilight Generation? To be honest, I don’t know. My first guess is that there are at least two Twilights for every Charmed. Over the coming months I will attempt to improve this quantification. Dick Stroud