‘Millennials’ put saving for deposit before a pension

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‘Millennials’ put saving for deposit before a pension

Home ownership comes before pension savings for those born in the early 1980s and the early 2000s – the so-called millennials or generation Y.

Despite the government push to get more people saving through initiatives such as auto-enrolment, rising house prices means more young people are fixated on getting a deposit, according to Tony Stenning, savings and investment specialist for fund manager BlackRock.

“Retirement is a priority for one in four younger people, but the goal of being a homeowner means it falls behind in their list of priorities” said Mr Stenning.

His comments came as BlackRock’s latest Investor Pulse survey revealed that a failure to plan for the longer term could affect younger people later in life. The analysis suggested that most millennials expected to retire at 62, live until age 79, and believed that a pension pot of £167,000 would cover their retirement.

However, according to estimates from BlackRock, based on ONS figures, a 30-year-old can expect to live until age 90 – meaning they would have a significant shortfall in pension savings.

Adviser view

Ray Black, managing director of Lincolnshire-based IFA Money Minder Financial Services, said “There is a disconnect with reality here. What they expect to save will not last for their expected retirement, let alone the time they will probably have.

“There is an advice gap resulting from a lack of interaction between advisers and the younger age group, and the urgent need to educate them in the reality they face.”