Savers in their 20s and 30s who are mired in debt should be encouraged to start pension contributions however small, Prudential has urged.
The call follows a survey carried out by the provider which found clearing off student loans and saving to get on the housing ladder is the main reason cited by those aged less than 40 for not saving into a pension.
In total the survey of 1,052 people found 24 per cent of under-40s felt they could not afford to save into a pension.
Prudential's Intergenerational Retirement study highlighted a generational divide in pension provision that looks set to grow as younger generations face continuing financial pressures that were unknown to those now approaching retirement.
While 48 per cent of those aged less than 40 cited the cost of education and the rising cost of getting on the housing ladder as the main reason for being unable to afford to save for a pension, a further 31 per cent of 31 to 40-year-olds and 24 per cent of 21 to 30-year-olds cited giving family financial support as the main reason they can not afford to pay pension contributions.
Kirsty Anderson, a retirement income expert at Prudential, said: “Modern-day financial pressures are forcing people of all ages to risk their future by putting pension saving on the back burner.
"Yet, even the smallest pension contributions made during a saver’s 20s and 30s will be invested for up to 30 years or more, and will have the opportunity to grow significantly."
Ros Altmann, former pensions minister and pensions commentator, agreed stating that younger people should not lose out on the employer contributions that come with a pension.
She said: "If you do not pay into a pension you do not get any employer contribution, which is growing for you and over the long-term is very valuable.
"That does not mean you should not pay off your debts, but at the end of the day if you have no pension scheme at all that is a very short-sighted approach."
Prudential’s research also found that for younger generations, debt has an impact far wider than just on their retirement savings.
More than a third of those aged 21 to 30 are worried about their levels of personal debt and 55 per cent claim that debts impact their happiness and well-being.
For the 51 to 65 age group the figures drop to just 8 per cent who worry about debt and 25 per cent whose debts impact their happiness.