Pre-retirement baby boomers are now increasingly pessimistic about their income prospects. One latest consumer confidence survey of 2,006 people in April 2017 showed that baby boomers were the most pessimistic age group. It found 33 per cent of 55-64 year olds think they will have less disposable income in the next year, compared with only 29 per cent of over-65s and 19 per cent of 18 to 24 year olds.
This may reflect pre-retirees’ concerns over financing ‘life’s longest holiday’, while over-65s have benefited the most from the ability to withdraw cash from their pension pot, as well as the state pension triple lock policy of the past few years.
The lack of confidence about the future is translating into the spending plans of the key 55-64 year-old age group. Grocery is the only category where more 55-64 year olds expect to spend more, rather than less, in the coming year, and this is primarily a result of expected price rises.
In other spending categories, such as going out, big ticket purchases and clothing, at least a quarter of 55-64 year olds expect to spend less in the coming year, compared with less than 10 per cent saying they will spend more. This contrasts with under 25s, more of whom plan to spend more rather than less in categories such as beauty and personal care, clothing and accessories, and health and wellbeing, none of which are priorities for over 55s.
Retirement prospects are going into reverse so this research makes sense. We know successive waves of pensioners reaching retirement in the next couple of decades will have progressively lower pension payouts. Throw in the uncertainty over the economy, it would perhaps be more surprising if they weren’t a little pessimistic.
How do YOU feel about your near term Boomer future? Optimistic or pessimistic?