Common assumptions that young people are uninterested in pensions or saving for the future have been questioned by new research which suggests many would decline a job offer if the pension deal was deemed unsatisfactory.
Nearly six out of 10 people in their first 10 years of work considered the quality of the employer’s pension scheme before deciding on a job offer, according to research from Prudential.
These individuals will also assess any potential new employer’s pension scheme before moving jobs in the future, the survey found.
According to the research, which polled 740 UK adults - most of them between 18 and 34-years-old - two in five of respondents believe their saving efforts are on track to help them match the living standards of today’s pensioners, when they give up work themselves.
However, just over a third acknowledge the rising living costs, and accept that the amounts they are saving today simply won’t be enough to support a comfortable retirement.
Millennial women are more realistic than their male colleagues about these challenges.
Just under one in three of the women surveyed were confident their retirement incomes would match that of older generations, compared with more than half of men.
Prudential’s research also found that many younger workers are considering making personal sacrifices to save for retirement.
Some 31 per cent say they will consider cutting back on spending for the next 10 years to focus on their pension, while 30 per cent are considering a move to a less expensive part of the country.
Meanwhile, 29 per cent of individuals think a consultation with a financial adviser could help to make sure they understand their savings and investments better.
According to Kirsty Anderson, a retirement expert at Prudential, these results are a “welcome surprise”.
She said: “The success of automatic enrolment means that many of them will now be saving into pension schemes for the first time, but what these figures show is that they are going above and beyond the bare minimum required, and setting aspirations to match their grandparents’ quality of life when they give up work themselves.
However, Ms Kirsty said that the members of the millennial generation “who are most likely to be best placed when they retire will be the ones who have saved as much as possible into a pension for as long as possible in their working lives”.
William Burrows, retirement director at Better Retirement, said “it is comforting to know that most millennials are thinking positively about pensions and taking money matters seriously”.
He said: “Times might be tough for the younger generation, but there are signs that government recognise their plight and starting to find ways of helping them.”
According to reports, which have not been confirmed by the Treasury, the government plans to cut national insurance contributions for workers in their 20s and 30s, which would be funded by reducing tax relief for people approaching retirement.
However, the “elephants in the room are housing and student debt,” Mr Burrow argued.
He said: “Good advice to millennials might be to stick with your employer’s pension scheme, get on the housing ladder and try to avoid getting even more into debt.
“The problem is that many millennials don’t have enough money to do all of this while at the same time spending money on the things young people do to have a good time.”
maria.espadinha@ft.com
