Pensions  

Pensions at bottom of list for young savers

Pensions at bottom of list for young savers

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

 

Gen Z

Millennials

Gen X

Make additional contributions on top of auto-enrolment

23% 

17% 

25% 

Opt out of all contributions

17% 

15%

10% 

Don’t know how much they currently pay

23% 

23% 

26% 

% who believe the savings target is unachievable

25%

21%

26%

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.

amy.austin@ft.com

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