PEOPLE AGED between 45 and 54 earn more than any other age group but save the least, according to new research by wealth manager Brewin Dolphin.
The report found that 62 per cent of this age group in Yorkshire classify themselves as only “getting by”, “making ends meet” or “struggling”.
Brewin Dolphin found that they are facing a triple whammy of financial challenges.
Firstly the road to retirement is running out and this age group in Yorkshire face a pensions shortfall of £322,000 – the difference between the size of pension fund they need to give them the retirement income they want and the size of the actual fund they are expected to have.
Brewin Dolphin said that it’s not just about finding more cash to save, but making better use of what people already have.
“Giving up that flat white on the way to work every day could add £22,000 to your pension,” said Richard Harwood, divisional director of Brewin Dolphin’s Leeds office.
Secondly, the report looks at the rising costs of this age group’s children’s university education and explains why parents should prioritise helping their children avoid taking on this much debt so early in their lives.
It said that going to an English university and borrowing the maximum in student loans to cover tuition and maintenance means that many students are starting their working lives with a huge £54,000 debt burden and will spend the next 30 years paying it back, hindering their chances of buying a first home or investing for the future.
Thirdly, this generation’s financial life rafts have sprung a leak with 19 per cent of this age group in Yorkshire relying on an inheritance to support their financial future.
However their parents are living longer and this means that average annual care costs of £30,000 (£40,000 with nursing) are threatening to rapidly erode once relied-upon estates.
Mr Harwood said: “It’s no wonder the majority of this age group are feeling a big squeeze. 45-54 year olds are in the perfect financial storm, facing the combined pressure of providing for their children, caring for their ageing parents, and trying to achieve their own career and retirement ambitions.”