28% of young savers opting out of pensions to save elsewhere

More than a quarter (28 per cent) of 18-24-year-olds have chosen to opt out of their workplace pension to save money in other ways, with many showing more interest in cryptocurrency, according to research from NerdWallet.

The survey found that a further 23 per cent of young savers have decreased their pension contribution over the past 18 months, with almost a third (31 per cent) stating that they would rather invest in cryptocurrency than save into a traditional workplace or personal pension.

In addition to this, over a third (36 per cent) of 18-24-year-olds thought it was more important to invest in stocks and shares ISAs, while 35 per cent thought it was more important to contribute to cash ISAs.

Pension planning was also found to be low on the priority list for younger savers, as more than one third (34 per cent) said it would be more important for them to pay off a mortgage early than start saving into a pension, while 82 per cent are yet to work out how much they need for a comfortable retirement.

Over a quarter (26 per cent) of respondents were reluctant to save into a pension because of the risks involved, whilst 30 per cent said they could not afford to make regular pension contributions due to a lack of disposable income.

A further 29 per cent said they do no plan on starting a workplace or personal pension as they think that the state pension will be enough to support them in retirement, while 24 per cent were putting off sorting out a pension because they do not understand how it works.

Commenting on the findings, NerdWallet senior pensions expert, Richard Eagling, said: “The younger generation seem to be re-writing the retirement rulebook, with cryptocurrency a bigger draw than pensions for almost a third of young adults.

“Our survey shows that many youngsters are in danger of overlooking the unique advantages that pensions offer, in pursuit of the thrill of higher risk and potentially higher reward investments such as cryptocurrency.

“At the same time, a significant number of 18–24-year-olds are not engaging with retirement planning at all, or prioritising other financial goals.

“It is vital that young adults not only take steps to save for their retirement as early as possible, but also understand which products are most likely to give them the best chance of a comfortable retirement.”

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