The average adult aged 20-40 wants to retire at 59 with an annual retirement income of £26,000 from all income sources, according to research from Moneybox.

The saving and investment app’s survey found that more than half (52 per cent) of the group had already considered the annual income they would like to have in retirement, with 18 per cent stating that they had given it a lot of thought.

Even though only around half of the group had considered annual income, almost nine out of 10 (87 per cent) of those surveyed said that they were concerned about saving for their retirement, with 37 per cent stating that they were extremely concerned.

Around two-fifths (42 per cent) said they had considered retirement income due to concern about their standard of living post-retirement, while 40 per cent wanted to be able to retire comfortably as soon as possible and 38 per cent said they had a growing concern about not being able to retire when they wanted to.

Finally, a third (33 per cent) said their motivation had been the Covid-19 pandemic making them more conscious of the need to plan for the future.

While 75 per cent of the group of young adults said they had taken some steps to save and invest for their long-term future, only 41 per cent believed they were currently contributing to a workplace pension and just 11 per cent knew they were benefiting from maxed out employer contributions.

Almost a quarter (23 per cent) of the group had opened a dedicated cash savings account, 16 per cent had a dedicated investment account and 12 per cent had chosen to invest in trading options which are designated as higher risk, such as cryptocurrency.

However, only 11 per cent were contributing to a personal pension, 12 per cent had tracked down old workplace pensions and 11 per cent had chosen to consolidate their old workplace pensions.

Among the 42 per cent who had not given any thought to their desired income in retirement, 44 per cent said this was because it felt impossible to know how much they will need, while almost a third (31 per cent) were too scared and overwhelmed to think about it and 19 per cent admitted it had never occurred to them to do so.

Moneybox co-founder, Ben Stanway, commented: “It is clear from our research that many young adults are beginning to realise how much they will need to save to be able to enjoy a comfortable retirement.

“The challenge they face is significant, especially when you consider changing external factors such as the rising state pension age, increasing cost of living and the fact that our research found that two thirds were never taught about the importance of saving for retirement.

“It is clear there is a lot of confusion and even anxiety around this topic and this is something we are committed to helping address.”

He noted that 37 per cent of young adults had been taught the importance of retirement saving, but warned that the “lack of financial education provided during our school years” has left many people unclear about what actions to take in their 20s and 30s.

Stanway concluded: “It is clear that young adults are willing and committed to doing what they can to realise their longer-term financial goals. Reassuringly, having been guided to consider their ideal retirement (age and income), almost three quarters (74 per cent) of respondents said they will prioritise saving for life after work more in the future.”

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