MGM Advantage, the retirement income specialist, has identified the emergence of Britain’s eBaby Boomers as one-in-five of the post-war generation are selling their possessions online in a bid to meet the rising cost of living. Such is the level of concern over making ends meet, it is now the single biggest fear for adults when considering retirement, above even concerns over health.
Published today, the findings1 illustrate the financial situations of UK adults, including those who are approaching, or have just begun their retirement. 53% of all UK adults said the cost of living is their main fear for retirement, above keeping fit & healthy (45%) and losing a spouse or partner (32%). The rising cost of living is also most likely perceived to be the single biggest financial threat to retirement plans (37%), above not saving enough (30%).
In response to spiralling living costs 21% of the baby boomer generation are selling their possessions online to maintain their standard of living, a group MGM Advantage has termed the eBaby Boomers.
Andrew Tully, Pensions Technical Director, MGM Advantage said: ‘Far from being immune, members of the baby boomer generation are, like many others, grappling with the UK’s rising cost of living. At a time when we would hope such people were saving in preparation for retirement a large number are instead selling off their possessions on eBay just in order to make ends meet. It’s a situation that is unsustainable and a potential horror story for the eBaby Boomers when they retire.’
Other ways being considered to bridge the living standards gap include selling homes. Of those people already in retirement, 30% now plan to move house in order to help fund their on-going living costs.
Andrew Tully said: ‘We’re used to people in the UK moving to the coast when they retire. But, what we are seeing now is less about aspiration and more about necessity. Baby boomers and others in retirement have been hit hard by the rise in the cost of living and they’re resorting to selling property and possessions in order to make ends meet.’
The cost of living has risen for three and half years, as price rises have outstripped pay rises. Although the rate of inflation, measured by the Consumer Price Index, fell to 1.9% in February 2014, it continues to outpace increases in earnings, which grew by 1.1% according to the ONS.
1. Source: MGM Advantage research among 2,028 UK adults aged 18+, conducted online by Research Plus Ltd, fieldwork 17-22 October 2013. Baby boomers are currently 50 – 68 years old.
Erosion of purchasing power: Each year 90% of people who convert pension savings into retirement income use an annuity with no escalation. The average pension pot at retirement is around £33,000. If inflation averaged 3% over a typical 25-year retirement, the real value of the income would reduce by 53%.
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