The future of the pensions industry has been dealt a further below as young people feel saving for property is more important than retirement.
The study, conducted by MRM and CISI, found that 46 per cent of young people were focusing on saving for a house whereas only 33 per cent priroritise saving for a pension. In addition, analysis by Deloitte showed the UK savings gap is set to reach £350bn by 2050, which could equate to a individual shortfall of £10,000 pa.
Sophie Robson, consultant at MRM and author of MRM’s Young Money report, said further work to encourage young people is required, “The idea of owning a house is deeply entrenched in the national psyche and while house prices remain as high as they are and wage growth stays sluggish, the quest to get on the property ladder means pension saving is set to take a back seat for some years to come.”
Financial Planning Week began on Monday 6 June and aims to encourage individuals to address their immediate finances, while also making long-term provision. Financial planning firms across the country will be offering free consultations to help young savers.
Rebecca Taylor, CISI board director and managing director of Aurea Financial Planning, said a proactive approach to target young people is vital, “As a financial adviser, I see a lot of people in their 50s, but far fewer peopling in their 20s. While this is understandable, young people often lack assets and disposable income. I can’t help thinking this is a real missed opportunity.”
Ms Taylor added, “Early engagement with money management is key to plugging the savings gap and enhancing young people’s prospects post-work.”