Gen X: the first generation to be worse off than the preceding one

A few years ago, I listened to a podcast where they talked about Generation X being the first generation that would be worse off than the preceding one. Last week, Aviva published their Family Finances Report 2017 which echoed the same thing. I am going to look at some aspects of their report and how it is affecting Generation X in Ireland today.

And our survey says

Part of the Aviva report features an in depth study on the “Squeezed Middle”; those from the ages of 35 – 54. It is this age group that are finding things tough as they are the most likely to have children and debt. They are also the generation who lived through the Celtic Tiger and all its benefits but then suffered the consequences of our largesse, with many losing their jobs and suffering from austerity cuts. A number of factors have resulted to them being known as the Squeezed Middle.


The Squeezed Middle are most likely to have negative equity mortgages after buying in the boom years of the Celtic Tiger. Negative equity and the way it is handled in this country has had a massive impact on families lives, with many people unable to move on following the purchase of overpriced property during the boom.

The sheer scale of the levels of debt is devastating. We’ve all heard the Baby Boomers tell us how they paid interest rates of 16% when they had mortgages. But they were paying 16% on relatively small amounts, with mortgages that were very difficult to obtain. For example, 46 years ago, my parents bought their home for £7,500. A house down the road from them recently sold for €600,000. For a first time buyer taking on debt of €540,000 over 30 years will cost them €2,000 in mortgage repayments.

I have spoken to many clients who have given up the hope of buying their own home after their experience during the Celtic Tiger. They are stuck with 1 bed apartments that are still deeply in negative equity and despite having good jobs, they simply cannot afford to buy a house for their family. They have decided to rent in an area that they want to live in rather than move away from friends and family to an area they can afford. The debt is going to stay with them for decades.

Childcare costs

This has been an issue for Irish families for years now and successive governments have done absolutely nothing about it. It costs about €1,000 a month to put your child in a creche full time. That is a staggering amount of money to have to pay each month on top of the mortgage you are paying for your very expensive home. Aviva’s survey found that 70% of the Squeezed Middle had children and 36% pay for childcare while over 67% pay towards their children’s education.


Aviva found that education is closely aligned to financial well being, with the majority of those who do not have a degree are struggling, whereas more than a third of those with a college education are comfortable.

We have seen this play out around the world. Automation has replaced what used to be well paying manufacturing jobs. Now, unless you have the qualifications to design or repair these machines, there is no job for you in these factories. And what has replaced these well paying manufacturing jobs? Zero hour contracts in retail.


Over half of Generation X said that they are not at all prepared for retirement. Not only have the well paying manufacturing jobs gone but so has the defined benefit pension scheme. We have gone from where the employer bore most of the cost of a guaranteed pension to where they contribute a fixed amount and what you get depends on how well your investment performs.

While over half of Generation X are not prepared for retirement, a similar amount expect to be comfortable in retirement. What do they think is going to happen between now and retirement? If they don’t plan for it, it won’t happen. Remember, there is never an ideal time to start a pension as there are always demands on your money, so you just need to start the habit.

Another worrying finding is that 10% of the Squeezed Middle believe they will carry significant debt into retirement. We have found that this is the biggest mistake that a retiree can make . While your income will reduce in retirement, your debt won’t and it will just take up an even higher proportion of your income.

The Aviva findings were quite startling but it is something that we all knew was happening. But because people don’t talk about money, it is not brought out into the open. Well, it need to be.

Let me know what aspects of your finances you find the most difficult and what your outlook for the future is. My email address is