21 August 2025
general
If you are a member of Generation X, or “Gen X” – born between the mid-60s and the early-80s – the dream of retirement is getting closer to becoming a reality. However, recent headlines have highlighted a growing concern for this generation’s financial future.
A significant number of Gen Xers are falling into a “retirement readiness gap”. In other words, they are vastly underestimating the financial resources they will need to maintain their desired lifestyle once they stop working.
Indeed, LV= research published in the Workplace Journal highlights that 66% of those aged 45 – 49 felt unprepared for their retirement. Some aren’t certain of their income options in retirement, and others noted they were confused by the information they found.
If you’re approaching this key life stage, now is the time to take stock of your financial situation and ensure you’re on the right track.
Generation X have had to face several unique hurdles in their personal and professional lives
Members of Generation X could find themselves in a unique and sometimes challenging position when it comes to retirement planning.
Some of the contributing factors include:
Fortunately, despite these hurdles, you can still take meaningful action to reinforce your financial foundation and prepare for retirement.
6 steps you can take to prepare for retirement as a Gen Xer
Even if you’re feeling behind, there’s still plenty you can do to help secure your retirement. Here are six ideas to explore.
1. Assess your current situation as realistically as you can, then estimate your future needs
First, it’s important to realistically assess your current situation. This means calculating your net worth by adding up all your assets and subtracting your liabilities.
An equally vital part of this step is to honestly estimate how much you expect to need for retirement.
As of the 2025/26 tax year, the Retirement Living Standards note that, in order to live a comfortable life in retirement, one person would need at least £43,900 annually. This increases to £60,600 for a couple.
Consider your ideal retirement lifestyle, factoring in potential travel, downsizing, or new hobbies. Be sure to also consider any healthcare costs, as your needs may increase as you age.
Finally, take the time to review your pensions (and any other accounts you are using to save for retirement) so you can understand what you have. Check your statements, track their performance, and, where possible, work out what they could be worth by the time you retire.
2. Maximise your pension contributions where you can
Once you have a clear picture of your financial situation, your next step could be to maximise your pension contributions.
When you pay into your pension, the government typically adds a top-up payment as “tax relief”. This is the money you would normally pay in Income Tax. In most cases, you won’t need to take further action as your pension provider will apply this tax relief for you.
However, you may need to claim tax relief through self-assessment if:
Notably, a powerful way to boost your contributions could be through your workplace scheme, as some employers may be willing to match your contributions. Don’t hesitate to speak to them about your options.
Keep in mind that there is a maximum limit on how much you can contribute to your pension in a single tax year without facing an additional tax charge. This is called your Annual Allowance.
Note that your Annual Allowance may be lower if your income exceeds certain thresholds or you have already flexibly accessed your pension.
3. Optimise your investments with the support of a financial planner
As you move closer to retirement, your priorities and risk tolerance might change.
While you might look at dialling back your risk, you can still optimise your portfolio for long-term growth by ensuring that your investments are appropriately diverse for your needs. This is something a financial planner can help you with, as they’ll be able to analyse your unique financial situation and propose options that suit your financial goals.
This could include investing in different asset classes, such as stocks, bonds, and even real estate.
You can also aim to minimise fees on your investments, as these can erode your returns over time.
Most importantly, avoid emotional investing where you can. Sticking to your long-term plan, with the support of your financial planner, could help you weather market downturns.
4. Explore additional income streams if required
To further bolster your funds, you could consider exploring additional income streams. These could even take you into retirement, providing a supplementary income while keeping you engaged and your mind occupied. Doing so could also mean you can delay drawing down your main retirement funds.
Even before retirement, additional income streams can provide extra income to boost your savings, whether it’s consulting, freelancing, or monetising a hobby.
If you own additional property, you could consider the potential for rental income, but being a landlord comes with its own considerations, so be sure to speak with us to learn more about the financial aspects of renting out your property.
5. Strategically reduce your debt
A particularly potent strategy to help increase your retirement savings could be to reduce how much debt you’re carrying. Ideally, you want to minimise the amount of debt you’re taking into retirement, but reducing it before that could also free up more money for saving and investing.
Start by prioritising high-interest debt, such as credit cards. The interest payments on these can be substantial and might hinder your savings efforts.
Second, while not always feasible, increasing your mortgage payments to reduce or even eliminate your debt before retirement could free up a significant amount of your budget each month. This could make your retirement funds stretch even further.
However, before you do this, it’s worth comparing the relative benefits of paying off your mortgage and contributing more to your pension.
If your expected pension returns are greater than the interest rate on your mortgage, it could be more beneficial to contribute to your pension instead.
Furthermore, your mortgage repayments will come from post-tax income, whereas pension contributions will come from pre-tax income. So, there’s also a potential tax saving when prioritising your pension over paying off your mortgage.
As you can see, this requires careful planning, and shows just how important it is to take advice first.
6. Seek professional guidance
Finally, don’t hesitate to seek professional guidance. A financial planner can provide you with personalised guidance and help you create a comprehensive retirement plan suited to your needs and unique financial situation.
Whether it’s debt reduction or finding ways to optimise your financial plan, professional advice can go a long way towards helping you build a retirement plan that can not only support your ideal retirement but also overcome market downturns and unexpected hurdles.
Get in touch
The retirement readiness gap for Gen X can be a real concern, but it’s not insurmountable. By taking proactive steps and making informed decisions about your finances, you can bridge the gap and ensure that the retirement you’ve dreamed about can become a reality.
We’re here to help.
Email enquiries@jesellars.co.uk or call 01934 875 919 to find out more about what we can do for you.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available.
The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.
