Baby boomers beat the X generation to retirement riches

By MARK FRYER

A lot of the agonising over superannuation comes down to a single question - how will we cope when all those baby boomers retire?

But recent overseas research suggests that the boomers might not be so badly off, compared with those coming along behind.

In Britain, consumer watchdog the National Consumer Council has described many under-35-year-olds as the "no-nest-egg generation".

A council survey of 21- to 34-year-olds on modest incomes, released last month, found an increasing number were building up large debts, thanks largely to student loans and credit cards.

Saving had a low priority, and what saving there was tended to be short term, rather than aimed at providing a pension.

Young people also had little faith that saving for old age would pay off and little confidence in governments providing for them. They also had little confidence in banks or financial advisers.

Closer to home, AMP has been looking at Australia's Generation X, usually defined as those born between 1961 and 1976.

A study carried out for AMP by the National Centre for Social and Economic Modelling has uncovered some rapid changes in the distribution of wealth - and not in the Gen Xers' favour.

This year, says the survey, 25- to 39-year-olds owned 19 per cent of all household wealth. That's a big drop from 1986, when that age group accounted for 27 per cent of all household wealth.

A lot of the change comes down to housing or, more accurately, a lack of housing. In 1989, 64 per cent of 25- to 39-year-olds owned their own homes, either outright or with a mortgage. By 1999 the proportion was down to 54 per cent.

"At this stage we are not sure whether there will be more Gen Xers who will never own a home than the previous generation. But we do know that home ownership rates by age are falling over time," says the report.

As it points out, the irony is that younger taxpayers will have to pay for the boomers' pensions but, under the Australian system, when they retire the Gen Xers probably won't qualify for a state pension, because they will have individual superannuation.

In this country, a survey by Tower this year found that over half of 18- to 34-year-old New Zealanders say they are particularly worried about money.

In Auckland, which seems to be the national worry capital, more than 70 per cent of young people say they frequently worry about the cost of owning their own home and the amount of debt they have.