The report showed household finances have changed over the last decade. It compared the period 2006-2008 to 2014-2016 and found that people of working age were worse off than those of the same age 10 years earlier. This contrasted with individuals around retirement age who had significantly more wealth in real terms.

The report also showed that people are buying property later. Notably, Generation X – those born in the late 1960s and early 1970s are more financially stretched than before. Tom Selby, senior analyst at AJ Bell, said: “There is an argument to say those caught in the middle – so-called Generation X – face the biggest retirement savings challenge. Many will have just missed the boat on DB and will only benefit from auto-enrolment in their 40s, meaning they will face an uphill task in building a decent pension pot.”

He added: “Younger savers are being boosted by automatic enrolment, with matched contributions and value-for-money pensions now a legal right for most workers. Older workers, on the other hand, were entirely at the whim of their employer and many had no opportunity to build up private pension wealth at all.

“Auto-enrolment only extends to those in employment, however, meaning the growing army of predominantly younger self-employed workers risk missing out. Without a Government-led solution for this section of society they risk facing serious hardship in their later years.

Changing financial needs

Steven Cameron, pensions director at Aegon added: “There is a growing awareness of the varying wealth profiles and financial challenges faced by different generations be they Baby Boomers, Generation X or Millennials. Both socio-economic and demographic trends have led to significant change over the last 10 or 20 years, meaning individuals across the age bands can have very different attitudes towards, and needs from, financial services.

“It’s essential that Government policies fully reflect these age differences and that all policy areas not only meet the needs of each generation but deliver intergenerational fairness. This is particularly important in areas such as pensions, social care and housing, where the financial services industry has a key role to play in supporting individuals with their financial planning. As our population ages, attitudes towards retirement are becoming more flexible, while the financial challenges of funding social care will continue to grow, making this a priority.”

Selby believes app-based technology has the potential to revolutionise savings in the UK, with investments available at the touch of a button: “Although the challenges that exist for these different cohorts of people are fairly clear, there are no easy solutions. The shift from paternalism to individualism has happened as a result of massive, unstoppable demographic trends – no single product or ‘innovation’ can change this fact.”