A recent study conducted by Active Chartered Financial Planners has found that only 21 per cent of those aged between 25 and 35, and born between 1984 and 1994, believe that their pensions will be sufficient when it comes to retirement.
The research, which was conducted with almost 500 participants in the 25 to 35 age range from across the UK, found that 46 per cent of participants did not think they would get enough money to live on from their pension pot, and 33 per cent didn’t know.
The common understanding of the term ‘millennial’ relates to ‘a person reaching young adulthood in the early 21st century’ and therefore is generally understood to include those born in the 1980s, 1990s and early 2000s.
In a separate study, which the firm conducted through PanelBase, one of the country’s leading research providers, it found that only 13 per cent of the 532 respondents would deposit additional money into a pension fund after paying their necessary bills.
On being asked to select all options that applied, 50 per cent of respondents said they would save for a rainy day, 48 percent said they would spend the additional cash on leisure activities, 35 per cent would spend the money on clothes or a specific saving goal, such as a wedding, and 14 percent would give the money to charity.
Joe Carey, an Independent Financial Adviser at Active Chartered Financial Planners, said: “It’s easy to think of pensions as something for people reaching the end of their career to consider, however, it’s never too early to start planning for the future. As a millennial myself, I can certainly understand this mindset in myself and my social circle.
“It is concerning that, even since the introduction of automatic enrolment into pension schemes in 2012, the majority of 25 to 35 years olds are still not confident that they will have enough to retire on when they reach their 60s. In real terms, this means that in the next 40 to 50 years, we could have an ageing workforce because employees don’t have the means to retire.”
Joe added: “It is interesting to see that people within the Millennial Generation are also prioritising short term goals when they have spare funds, including rainy day savings, leisure activities and clothes. This suggests that many millennials are more concerned with saving for things that could impact them in the near future, such as emergency repairs to the car or home. This is, of course, very important to consider and prepare for, however they should also think about saving for the pension they may be reliant on in 40 years’ time.
“It is also worth noting that 78 of the people surveyed said that they didn’t have any money left over for pensions, savings or any other activity after they had paid their essential bills. This could also account for the reason why this generation is concerned about having enough money to retire.”