Over a third of millennials have claimed they prioritise saving for a deposit on a home instead of their retirement, with a fifth of them stating that buying a property is the main reason they do not save more into their pension, according to new research from Prudential.
Furthermore, 10 per cent said that student debt prevented them from saving more into a pension, while 9 per cent admitted that frequently changing jobs affected their ability to make regular pension contributions.
However, one in 10 millennials still live at home with their parents instead of renting to help save more money to buy a home, with men almost twice as likely (20 per cent) to be heading home compared to women.
Despite worries about graduate debt and the squeeze on wages, on average nearly a third (31 per cent) of respondents said they expected to buy their first property by the age of 30, with men (39 per cent) being more confident than women (26 per cent) that they will achieve their ambition.
Despite this, research has found that not all of them will have to save hard, with an optimistic 20 per cent expecting to receive financial support from the Bank of Mum and Dad.
Industry data revealed that millennials are right to be hopeful about home ownership, with around 365,000 first-time buyers completing mortgages in the year to July, borrowing a total of £59.9bn. The average age of the first-time buyer during the year was 30, borrowing an average of £145,000 on a gross household income of £42,000.
Pensions, however, are feeling the strain, with around 21 per cent of millennials claimed they have not yet started saving for retirement yet, while 15 per cent say pension saving does not motivate them and 12 per cent believe pensions are irrelevant to millennials.
Commenting on the findings, Prudential retirement income expert Kirsty Anderson said: “Juggling buying a house with saving for retirement is challenging and it is inevitable that something gets dropped which unfortunately appears to be retirement saving.
“Retirement can seem daunting for millennials and is, of course, a long way off when you are contending with student debts and high rents.
“However, it is crucial to start saving for your pension as early on as possible, putting away as much as you can each time. It is easier if you start doing this as soon as you start working so you get used to the money going straight into your pension pot. Many will at least be saving through the workplace, which is a good start, and contributions should be regularly reviewed to ensure a significant fund can be built up.”
Although overall millennials are prioritising home ownership over saving for retirement, not all respondents are focused on buying a property. Approximately 17 per cent of under-35s said buying a house is not a realistic option currently, while 11 per cent stated that saving for a deposit is not a financial priority.