Around one in eight (12 per cent) young adults, equivalent to approximately 2.2 million people, feel engaging with their pension is pointless because they will never be able to retire, research from People’s Pension has shown.

It described this group as ‘Nerds’ – the Never Ever Retiring Demographic – and warned the industry was failing to connect with them.

The research found that 47 per cent of young adults aged 18 to 27 were not engaged with their pension, and 12 per cent had already given up hope of saving for retirement as they believe they will have to work forever.

People’s Pension said there was a worrying disconnect between the financial services industry and the younger generation of savers, with 36 per cent of young people saying the sector failed to communicate the benefits of saving for retirement well.

Of this group, 27 per cent felt firms focused too much on selling products rather than educating people, while 16 per cent said they used complicated language or jargon.

One in five (20 per cent) said that financial firms made pensions feel boring and irrelevant.

The analysis highlighted differences between generations, with 29 per cent of Gen Z stating firms do not explain why pensions and savings matter for people their age, compared to 13 per cent of Gen X and Baby Boomers.

Furthermore, 17 per cent of Gen Z believed firms did not use channels they actually engage with, compared to 4 per cent of Gen X and Baby Boomers.

People’s Pension modelled different pension messages with younger people, and found that 70 per cent would act if they were told that starting to save in their 20s could double their retirement pot compared to starting in their 30s.

Two thirds (66 per cent) would act on the idea that £10 a week from age 25 could grow to £76,000 by retirement, and 63 per cent were motivated by learning that every 80p saved is boosted to £1.60 through tax relief and employer contributions.

The top five things cited by Gen Z that they felt would make pension saving feel less overwhelming and more achievable were: a simpler goal tracker or progress bar (31 per cent); knowing they can start with a small amount (26 per cent); examples of what people their age are doing (23 per cent); clear bite-sized steps to follow (22 per cent); and light-hearted relatable stories (19 per cent).

“In a world where financial doom dominates pension conversations, young savers are tuning out,” commented People’s Pension proposition director, Kirsty Ross.

“Our research shows they are not disengaged because they don’t care, they are disengaged because the messages aren’t working. Scare tactics and jargon are alienating the very people we need to reach.

“What cuts through is honesty, simplicity and practical advice that shows how small steps today can have a huge impact tomorrow.

“That’s why we’ve launched our Pension Drop campaign: to change the conversation and show how taking small steps now can make a big difference tomorrow – giving people back a sense of control over their financial futures.”

People’s Pension's Pension Drop campaign aims to get young people talking about pensions, and includes comedian and TV presenter, Iain Stirling, as an ambassador.

Stirling stated: “On the face of it, people probably think I’ve got it all sorted. I’m on TV, so it must look like I’ve got a perfect plan for the future.

“The truth is, I didn’t. For years I only thought about the here and now – spending what I earned, saving for a house, maybe thinking one or two years ahead at best. Retirement? Didn’t even cross my mind. I only started looking at my pension a couple of years ago, and I didn’t even know who my provider was. That’s how disconnected I was.

“Looking back, I really wish I’d started earlier. Putting something away in your 20s or 30s can make a massive difference later, we’re talking 10s of thousands of pounds. And I get it, people are really struggling right now, money is tight, and even small luxuries like a takeaway can feel like a big deal.

“But the reality is, your pension isn’t all on you. Things like employer contributions and tax relief can give you a boost, so even small amounts go further than you think. It doesn’t have to mean missing out today, just making smart moves so you don’t miss out tomorrow."

---