Covid-19 is putting the squeeze on Gen X

The ‘‘sandwich generation’’ may become the dry bread and water generation if they don’t stay on track for retirement.

Generation X, born between 1965 and 1980, aren’t the country’s most imminent retirees but bad habits picked up as a result of Covid-19 could cause serious damage to their nest eggs.

‘‘The thing about Generation Xes, especially the older Gen Xes, is how much working life do you have to repair some of the damage that’s been done,’’ said Retirement Commissioner Jane Wrightson.

The group worst-hit by Covid19 was younger, people aged 18 to 34, who were most likely to have lost their jobs, or to have precarious gig economy work; have no savings; and were increasingly less likely to own a home.

But at a time when Generation Xes need to be focusing on looming retirement, about 18 per cent of them had reduced or suspended their KiwiSaver contributions, Wrightson said.

‘‘They should be thinking about that incredibly hard, because the long-term savings nature of retirement is the trick to all of this.

‘‘It’s very hard to think longterm at the moment because people are stressed and a bit glum, but it’s crucial that one does.’’

The people most in trouble in that generation were more likely to be renters, not homeowners, she said.

‘‘We know that in our latest survey something like 12 per cent of people [in this age group] who are renting owe money to their landlord, but only 1 per cent of [Gen X] homeowners are behind on their mortgage.’’

Gen Xes commonly carried consumer debt and had low savings, making them vulnerable to shocks.

The middle members of the generation were at the peak of their mortgage debt, although that was for an asset at least, Wrightson said.

It was a generation that had missed out on formal financial education, which more recent school leavers were benefiting from, she said.

It was also a generation which did not grow up with KiwiSaver, which was launched in 2007.

Generation Xes needed to think about investing wisely, diversify their investments, and seek professional financial advice, something that New Zealanders in general were a bit loathe to do, she said.

‘‘If your retirement plan is your house and KiwiSaver, you need to start thinking a bit harder,’’ Wrightson said.

‘‘If your retirement plan is your house and KiwiSaver, you need to start thinking a bit harder.’’

Jane Wrightson

Retirement Commissioner