Self ish baby boomers
Generation wants to spend, spend, spend, rather than leave cash to kids
THE children of baby boomers are heading towards a financial shock after it was revealed their parents aim to spend all their cash rather than pass it on.
Baby boomers – generally referred to as those born between 1947 and 1964 – are often seen as the ‘selfish generation’ because they have benefited from good wages and rising property values before retiring on gold-plated pensions.
But now a study has shown that their children are facing poverty in old age unless they make better pension provisions.
One in four say they are relying on inheriting the money built up by their parents so they can retire in financial security – despite two out of three baby boomers saying they would rather spend their inheritance than pass it on and they will not bankroll the future security of their children. The study by law firm Stephensons reveals that 18 to 34-year-olds are more dependent on inheritance than any other age group as confidence in private and state pensions plummets.
The research showed millennials rank pension contributions even below savings when it comes to retiring, a stark contrast to the over-55s, where 80 per cent list pensions as their primary source of income during retirement.
Andrew Leakey, of Stephensons, said: ‘People often expect and rely upon a potential inheritance from parents or grandparents and in many cases are let down by the actual contents of the will. ‘Inheritance disputes can quickly deteriorate into lengthy court proceedings, dividing families for many generations.’
The study showed that regardless of the high dependency on inheritance across the country, almost half (48 per cent) of adults admit they have not discussed the contents of a will with the people they expect to inherit from. This rises to a shocking 79 per cent among 18 to 24-year-olds. The study also revealed a worrying regional divide, with a third of London-based respondents saying they would rely on inheritance to retire, the highest of any area in the UK.
By comparison, in Newcastle and Manchester, only one in ten said their retirement relied upon inheritance.
In April, Lord Willetts, a former Education Secretary, accused baby boomers of causing ‘blockages’ for young people in the labour market.
He said scrapping the automatic retirement age – allowing them to stay in their jobs into their 70s – had led to fewer opportunities for young people. Lord Willetts, who chairs the Resolution Foundation think-tank, said: ‘We have extended labour protections to people over 65, so now even if an employer did want to shed some staff aged 65 and recruit some younger workers, he has to show that they are not capable of doing the job any more.’
He added: ‘When you do things like get rid of the retirement age... in a recession and there are lots of older workers who stay on, what you see is that the boost to employment comes from the top end.’
The ‘baby boom’ followed mass demobilisation of servicemen after the war.
Writing in the Daily Mail in 2011, former Newsnight presenter Jeremy Paxman labelled the baby boomers ‘the most selfish generation in history’.
He added: ‘I belong to the boomer generation – a fact I feel increasingly uncomfortable about. No wonder we thought we had it all. Compared to those who came before, we did.’
‘Let down by the will’