Majority of young people favour earlier pension saving

More than four in five (82 per cent) young people in work aged between 18 and 22 believe that individuals in employment should start saving for retirement before the auto-enrolment age of 22, research by the Pensions Management Institute (PMI) has revealed.

The PMI’s study also showed 61 per cent of young people believed that all of an individual’s salary should be included for the calculation of pension contributions, not just income above the lower threshold.

Additionally, 59 per cent stated that the current statutory minimum contribution rate of 8 per cent was too low and would prefer a rate of up to 12 per cent.

The research also demonstrated the extent to which the cost of living affects young savers, with 49 per cent of respondents citing either existing rent or mortgage commitments, or saving for a deposit, as presenting serious obstacles to long-term pension saving.

PMI president, Lesley Alexander, commented: “The results of this research should kill off the lazy assumption that young people do not give serious consideration to preparing for their retirement.

“A popular cliché of a generation more concerned with cheap holidays and Netflix has been exposed for the lie that it is.

“It is emphatically clear that young people would be prepared to make a greater commitment to pension saving were they encouraged to do so.

“At the same time, however, we should not make light if the serious obstacles that Millennials and Zoomers face in bearing the financial cost of saving for retirement.

“There is much that government could do to ensure that young people are sufficiently incentivised.

“This research shows that the scheduled reforms to auto-enrolment should now be introduced as a matter of some urgency.

“Richard Holden MP is to be congratulated for his initiative in prompting pension saving at a time when society might not consider this to be a priority.”

    Share Story:

Recent Stories


Making pension engagement enjoyable through technology
Laura Blows speaks to Nick Hall, business development director and Chartered Financial Planner at UK-based Wealth Wizards about the opportunities that technology provides for increasing people’s engagement with pensions and increasing their retirement wealth. Please click here for an edited write-up of the video

ESG & DC – creating the right tools
In the latest of our series of Pensions Age video interviews Francesca Fabrizi, Editor in Chief of Pensions Age is joined by Manuela Sperandeo, Head of Sustainable Indexing EMEA, BlackRock and Mark Guirey, Executive Director, Asset Owner and Consultant Coverage - MSCI to discuss some key trends of ESG investing among UK pension funds today. Please click here for an edited write-up of the video

Savings and finance at retirement
Laura Blows is joined by Claire Felgate, Head of Global Consultant Relations, UK, at BlackRock, to discuss savings and finance at retirement. Please click here for an edited write-up of the video

Cost transparency
Pensions Age editor, Laura Blows, discusses investment cost transparency and savings with Aon’s Neil Smith and Chris Hawksworth. Please click here for an edited write-up of the video
Multi asset credit
Pensions Age editor, Laura Blows, discusses multi asset credit with Royal London Asset Management senior fund manager, Khuram Sharih

Advertisement Advertisement