Those born between 1965 and 1980 could suffer from weaker retirement prospects despite being deemed property rich, after failing to be included in generous pension schemes.
The so-called Generation X are at risk of “sleepwalking” into an inadequate retirement, regardless of their high exposure to property, owning twice as many buy-to-let homes as Baby Boomers, according to analysis from Rathbones.
Nearly 20 per cent of Gen Xers are likely to hold a property compared to nine per cent of Baby Boomers, but they are less likely to hold tax-efficient investments such as ISAs, with 66 per cent holding one compared to 78 per cent of Baby Boomers.
The recent interim report from the Pensions Commission on the state retirement in the UK identified Generation X as one of the most at risk cohorts, reflecting their unlucky timing of entering the workforce.
Many stepped into employment just as the ‘gold-plated’ defined benefit schemes were disappearing. The schemes granted a guaranteed, inflation-linked income for life, removing the risk of outliving retirement savings.
But they also entered as fewer employers were offering workplace schemes and automatic enrolment changed saving for retirement.
Slipping through the cracks
While Baby Boomers benefited from generous pensions, Generation X slipped through the cracks, leading them to stockpile property rather than liquid, tax-efficient investments.
Rebecca Williams, Financial Planning Divisional Lead at Rathbones, said: “Many Gen Xers are sleepwalking into retirement with far less financial security than their parents
“They came of age as defined benefit pensions were disappearing and have since faced years of stagnant wage growth and repeated financial shocks, making it harder to build robust, long‑term savings.”
Williams also noted that the age group also makes up a large portion of the ‘sandwich generation’ who find themselves juggling day‑to‑day costs while supporting both ageing parents and children, meaning boosting retirement savings can be put on hold.
She added: “It’s perhaps no surprise that property – particularly buy‑to‑let – has been seen as an alternative route to funding retirement. But relying on property as a pension can leave retirees overly exposed to a single, illiquid asset at a time when flexibility is most needed.”
House price conditions
The conditions which drove strong property returns in prior decades have also shifted, with prices rising by around 6.7 per cent a year between 1980 and 2016.
In London, this changes to 8.5 per cent, with both outpacing inflation.
Investors today are unlikely to benefit the same benefits.
Since 2016, UK house prices have risen by just 3.7 per cent annually, struggling to keep pace with inflation, while London property has underperformed, rising by just 1.3% a year, to the start of 2025.
Over the same period, stock markets have delivered significantly stronger returns.
Roughly £100 invested in London property in 2016 would today be worth around £111, compared with £174 if invested in equities.
Isabella Galliers-Pratt, Senior Investment Director at Rathbones said: “The conditions that fuelled the property boom have long since changed.
“Property is less flexible than pensions or investments, and rental income can be less predictable, particularly as higher interest rates, tax changes and rental reforms have squeezed returns and added complexity for landlords.
“The idea that property is always a ‘safe bet’ no longer holds true in many part
