In Focus: Intergenerational Wealth  

Millennials need help with future-proofing their finances

Millennials need help with future-proofing their finances

Advisers are needed to help reach younger savers to set them on a path to financial wellness, a pensions specialist has said.

Jordan Mayo, chief executive of Profile Pensions, said there was a significant gap between the generations when it came to savings and knowledge.

This was the result of a survey carried out by Profile Pensions among 1,178 adults in the UK, from which the company aimed to get a better understanding of how younger generations feel about saving for retirement.

According to the study, 30 per cent of millennials surveyed by the company are not even saving into a pension pot, while 25 per cent said they found pension rules 'very confusing'.

Mayo said it was clear from the research that advisers and employers could do more to encourage younger generations to get onto the investing ladder and start saving into a pension.

He told FTAdviser: "Our research shows that employers are not doing enough to explain pensions to their employees and that's where an adviser can help, especially for young people who are just starting out with pensions.

"Advisers can help young savers understand and engage with their pensions and make the right investment decisions taking into account things that are important to them like ESG, and helping set up good investing habits for life."

The study found:

  • Nearly a third of millennials aren’t saving into a pension pot.
  • 24% of millennials find pension rules ‘very confusing’.
  • Automatic enrolment has almost doubled the participation of 22-29-year-olds having pensions.
  • Many of those who fall into the ‘Millennial’ age bracket of 23-38 feel uninformed when it comes to pensions.
  • More than half (53%) said they wished their employer would explain pensions and their benefits to them.
  • The results also showed that 23% of millennials admitted they weren’t sure if they were on target for retirement saving.

Mayo added: "Unfortunately, what we’ve seen here is that while the majority of young people are, quite rightly, investing time into understanding what their pensions mean for them, there is still a large amount of the millennial generation who feel uneducated when it comes to saving for retirement. 

"There is a wealth of information on pensions out there, but making sure the right stuff reaches young people in a way that’s engaging and informative, is what we need to work towards together.”