Young savers have put pension saving at the bottom of their list of priorities and would rather save for a home or trips away.
Research from money.co.uk, published yesterday (July 2), found Gen Z (those aged 18-24) were the biggest savers but pensions were their lowest financial priority.
Instead they were focused on saving for a home (32 per cent), material goods (31 per cent) and saving for a dream holiday (28 per cent).
The research also found almost one in five Gen Zers was opting out of making pension contributions and a quarter did not think they would be able to achieve savings of £22,500 each year to live a comfortable retirement.
In addition, 23 per cent of Gen Zers did not know how much they currently pay into their pension and less than a quarter (23 per cent) made extra contributions on top of auto-enrolment.
Cross generation pension breakdown
Make additional contributions on top of auto-enrolment
Opt out of all contributions
Don’t know how much they currently pay
% who believe the savings target is unachievable
James Andrews, personal finance editor at money.co.uk, warned: “Once you pass the automatic enrolment earnings threshold (currently £10,000 a year or £192 a week) 5 per cent of your pre-tax salary goes straight into your pension to be topped up by your employer, unless you actively opt out or your firm has a more generous scheme in place.
“But while that might make some younger workers feel secure, remember that every extra pound you save a month in your 20s and 30s can be worth hundreds by the time you retire - but the later you leave it the less time that money has to grow.”
Overall, younger generations have been seen to take more interest in their money with a November survey of 1,000 advised families, carried out by Prudential, finding that 74 per cent of millennials and 58 per cent of Generation Z said they had seen, or were going to see, an adviser, driven by financial difficulty and wanting to start investing.
In addition, a third (32 per cent) of Generation X, one in five (21 per cent) Baby Boomers and a quarter (24 per cent) of those aged over 75 - often referred to as the 'Silent Generation' - said the pandemic had specifically driven them to seek advice.
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