Younger people prioritize pensions more than older generations

Irrespective of age, occupation or any long-term health conditions, many people will feel that at some point their lives they should start thinking about their future. Provision for old age is something many will consider, even in tough times like these; but it seems that younger people are more eager to save for later on in life than older generations.

Future anxiety

Those in their mid-20’s to early-30’s may have several financial issues to contend with, such as paying off debts accumulated at university, desperately trying to get onto the first rung of the property ladder and even saving a deposit on rented accommodation. Despite that, a survey by the National Association of Pension Funds suggests that many younger people are thinking about the future.

According to a recent survey those aged between 25 and 34 were more likely to increase their contributions to their pension funds than older people. Overall, 38% of people said they were planning to pay more towards provision of post-retirement income, with 53% of younger workers saying they were going to save more compared to 26% of 45-54 year olds.

Joanne Segars, chief executive of the NAPF, said: “These results are counterintuitive but encouraging. A few years ago these young workers were nicknamed the ostrich generation, because they knew they needed to plan their retirement, but were doing nothing about it.

“Their retirement might be decades away, but it looks like many younger people are taking their heads out of the sand when it comes to pensions.”

Thinking carefully

The uncertainty which has gripped the UK economy will likely have played some role in this surprising trend. With incomes being squeezed and questions being asked about the future of the state pension and retirement ages, saving as early as possible is something many young workers are giving thought to.

48% of those in the 25-34 age bracket revealed to the NAPF that they were already members of a workplace pension scheme, and auto-enrollment is likely to see that figure rise further. Despite that, there are still calls to try and make the complex nature of pension products a little easier to understand for those who are unsure what product will suit them when they retire.

Starting early

According to a spokesperson from mypensionexpert.com, saving for retirement at the earliest possible date is a smart move. They said:

“Starting saving for retirement at the youngest age possible is always advisable and beneficial. Saving over as many years as possible will no doubt help boost the funds available at retirement and will take the burden away from the later years of working life.

“These figures are therefore encouraging and could be down to the increased media activity surrounding one of the biggest financial services shake up, Auto Enrolment. The new switched-on generation cannot fail to notice the coverage of these changes.

“The increase in awareness could also be coming from their parents who are facing record low annuity rates and low retirement income and are therefore warning their children in advance”, they added.

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