People born in the 1960s and 1970s will be no better off in retirement than their predecessors unless they inherit wealth, according to a new report.
The Institute for Fiscal Studies has today published a study comparing the retirement wealth expectations of different cohorts of people born after World War Two.
The report says when compared with those born a decade earlier at the same age, people born in the 1960s and 1970s have no higher take-home income, are less likely to own a home, are likely to have lower private pension wealth and will usually find their state pension replaces a smaller proportion of their earnings.
The IFS says the shift away from generous final salary pensions to defined contribution schemes in the private sector has been a key contributing factor in the deterioration of retirement expectations for younger generations.
IFS research economist Andrew Hood says: “Since the Second World War, successive cohorts have enjoyed higher incomes and living standards than their parents.
“Yet the incomes and wealth of those born in the 1960s and 1970s look no higher than the cohorts who came before them.
“As a result, younger cohorts are likely to rely on inheritances to be better off in retirement than their predecessors.”