Half of Gen X Faces a Pension Squeeze, and Women Fare the Worst

For Generation X, retirement planning has often been described as a squeeze, and with good reason. Born between 1965 and 1980, Gen Xers sit awkwardly between two more fortunate cohorts: Baby Boomers, who largely benefited from generous defined benefit pensions, and Millennials, who have at least caught the tailwind of automatic workplace enrolment. Gen X, by contrast, missed out on both.

 

The result? A generation that is edging towards retirement with a mixed picture and troubling gaps, particularly between men and women.

 

The “forgotten” generation

 

Unlike their parents, Gen Xers generally don’t have the cushion of company pensions that guaranteed a proportion of salary for life. By the time they were climbing career ladders in the 1990s and early 2000s; most employers had already shuttered defined benefit schemes.

 

Nor have they had as much time as Millennials to benefit from auto-enrolment, which only arrived in 2012. This dual disadvantage leaves many in their late 40s and 50s with pension pots that may fall short of what they’ll need in retirement.

 

Estimates from the Department for Work and Pensions indicate a peak in below-target retirement outcomes for those reaching age 67–68 between 2030 and 2050. But here’s the twist: the gap between Gen X and other cohorts is not huge in percentage terms. The real story lies beneath the averages.

 

The gender pension gap

 

Dig deeper into the numbers, and the most significant disparities are clear; they fall along gender lines. According to Office for National Statistics data, private pension wealth among men in the 45–54 age bracket has hovered around £135,000 (in today’s money) since 2008. For women, however, the figure has fallen by nearly a quarter over the same period, to around £72,000.

 

That means the average Gen X woman holds barely half the pension wealth of her male counterpart. The reasons are familiar: pay inequality, career breaks for childcare or elder care, and less access to senior, higher-paying roles.

 

This translates directly into income in retirement. According to the Pensions Policy Institute, average private pension income is around £8,500 a year; women receive roughly £3,000 less than men. In practice, this makes women far more reliant on the state pension and exposes them to financial vulnerability if household wealth is not shared equally.

 

Why household averages can be misleading

 

Much pension data is gathered at the household level, where it is assumed that couples pool resources. On paper, this often makes families appear financially secure. But as Tim Pike at the PPI has pointed out, men typically own 75 per cent of pension wealth within couples. That imbalance may not matter in a stable partnership, but it can have serious consequences after divorce or bereavement.

 

This hidden inequality is one of the most pressing challenges for Gen X. Even households that look “comfortable” on paper may face internal financial power dynamics that leave women disproportionately exposed.

 

What can Gen X do about this?

 

The picture isn’t all bleak. Many Gen Xers still have a decade or more before retirement, and even small actions now can make a real difference.

 

· Boost savings where possible. Younger Gen Xers, in their late 40s and early 50s, can still increase pension contributions and put more into equities for potential long-term growth. Even those in their late 50s can benefit from investment growth before they start drawing down.

· Plan retirement spending realistically. Retirement needs often decline with age. Spending tends to peak in the early years, when people are active and travelling, before tapering as lifestyles slow. A carefully considered budget avoids the trap of unnecessary self-deprivation early on.

· Consider working longer but smarter. Extending careers by a few years can have an outsized impact on pension balances. As Patrick Thomson of Standard Life notes, moving to a higher-paying or more enjoyable role can make working into your late 60s more palatable.
 

The bigger picture

 

Gen X may not be as badly off as some headlines suggest, but the gender gap is undeniable. Men and women in this generation are entering retirement on very different financial footings, and unless addressed, that imbalance will ripple forward for decades.

 

Policymakers and employers need to do more to close this divide. In the meantime, the message for Gen X is clear: there’s still time to take advice and act, but action is essential.

 

Disclaimer: This article is for informational purposes only and does not constitute investment advice, a recommendation, or an offer to buy or sell any securities.

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