Those born between 1965 and 1980 risk an inadequate retirement despite significant property holdings, according to new analysis from Rathbones.
The so-called Generation X cohort owns twice as many buy-to-let properties as Baby Boomers, yet analysts warn they are “sleepwalking” into financial insecurity in later life.
Nearly 20 per cent of Gen Xers are likely to hold a buy-to-let property, compared to just nine per cent of Baby Boomers, the analysis found.
However, Generation X is less likely to hold tax-efficient investments such as ISAs, with 66 per cent holding one compared to 78 per cent of Baby Boomers.
A recent interim report from the Pensions Commission identified Generation X as one of the most at-risk cohorts, reflecting the unlucky timing of when they entered the workforce.
Many stepped into employment just as “gold-plated” defined benefit schemes were disappearing, removing the guarantee of an inflation-linked income for life.
They also entered the workforce as fewer employers were offering workplace pension schemes and before automatic enrolment transformed retirement saving habits.
Rebecca Williams, Financial Planning Divisional Lead at Rathbones, said: “Many Gen Xers are sleepwalking into retirement with far less financial security than their parents.”
Williams added that the group “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.”
She also noted that Generation X makes up a large portion of the so-called “sandwich generation”, juggling day-to-day costs while simultaneously supporting both ageing parents and children.
Williams warned: “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.”
The conditions that once drove strong property returns have also shifted considerably, with prices rising by around 6.7 per cent a year between 1980 and 2016.
In London over the same period, prices rose by 8.5 per cent annually, with both figures outpacing inflation by a substantial margin.
Since 2016, however, UK house prices have risen by just 3.7 per cent annually, struggling to keep pace with inflation across the country.
London property has underperformed even further, rising by just 1.3 per cent a year to the start of 2025, according to the analysis.
By contrast, roughly £100 invested in London property in 2016 would today be worth around £111, compared with £174 if invested in equities over the same period.
Isabella Galliers-Pratt, Senior Investment Director at Rathbones, said: “The conditions that fuelled the property boom have long since changed.”
She added: “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.”
Galliers-Pratt concluded: “The idea that property is always a ‘safe bet’ no longer holds true in many parts” of the market, signalling a need for Generation X to broaden their retirement strategies.