Millennials and Generation X are likely to have less understanding of pensions than Generation Z
Generation Z is more likely to care about their pensions than Millennials and Generation
According to data from InvestEngine, 64 per cent of 18- to 34-year-olds said they were involved in their pensions, while 70 per cent of over-55s reported they had an interest in their savings.
That fell to 58 percent among people aged 35 to 55, who often face life commitments and other milestones that take their attention away from saving for a pension. Buying a home Having children leads to the transfer of financial resources from their retirement fund.
Pension funds: It is feared that many UK workers are not saving enough money for retirement
Although many are likely to pay a pension under the auto-enrolment scheme, if they do not deal with their pool, they could miss out on opportunities to match the higher contribution offered by their employers.
People also run the risk of forgetting certain pension funds when it comes to withdrawing their pensions.
Andrew Prosser, head of investments at InvestEngine, said: “While auto-enrolment has undoubtedly been a huge success in reversing the decline in workplace saving, it has arguably exacerbated the lack of engagement we see today, especially among adults. In middle age.”
“In fact, this group needs to be more involved, because the later they leave the less time they have to take advantage of any potential returns on their pension investments.” His company surveyed 4,000 adults across the UK.
By neglecting to save now, Millennials and Gen Data from the Department for Work and Pensions suggests that 38 per cent of the UK’s working population, or 12.5 million people, are not saving enough money for retirement.
However, reducing your pension contributions is not always done out of ignorance. More often than not, the facts of life get in your way.
Sean Cobb, 36, reduced his pension contributions before he bought a flat last year, rather than using the extra money to maximize his deposit.
“After using up all my savings, I didn’t have much left, and then I had to do some renovations around the flat, so I was just looking to cut costs where I could,” Sean said.
Before getting on the housing ladder, Sean increased his pension contributions, having been self-employed for the previous five years.
“For about a year or eighteen months, I have been active in paying in excess of the automatic enrollment contribution, but before that I was not involved at all. I have no idea where the previous pots from previous roles have been for the past ten years, and I still don’t I know where a few of them are.
“My financial priority this year is just paying off my credit card. I’m trying to clear all that away and get a clean slate, then I can start planning for the future a little more.”
“Given that I have about 30 years of work left, and I pay a pension, I hope that will be enough to increase the contribution.”
According to data from wealth management company Saltus, 79 per cent of grandparents provide their adult grandchildren with financial support of £11,000 a year on average, to help them pay rent, mortgages, higher education and other bills.
As a result of this support, 14 per cent of grandparents reduced their pension contributions.
Mike Stimpson, partner at Saltus, said: “It is difficult to know how long this level of support will last, or whether it will become more common as the cost of living crisis continues, but it certainly underscores the importance of effective support.” Financial planning to ensure your money is spent to its full potential when you need it most.’
Research from Resource Solutions shows that Generation Z is the generation most concerned about retirement, with 72% of young people concerned that they may not be able to stop working at state pension age due to their finances.
About 70% of millennials also reported having similar concerns.
These concerns come as a study conducted by the International Longevity Center indicates that the UK He will have to raise the retirement age to 71 years From the current 66 by 2050 in order to maintain the current number of workers per state retiree.
The idea of retirement often seems too distant to be a priority for many young and middle-aged adults, especially during these tough economic times, but the risks of not getting involved early can be significant, said Andrew Prosser of InvestEngine. ‘
Work longer: Research by the International Longevity Center shows that the retirement age may need to rise to 71 by 2050
But for 24-year-old Leo Hodges, future savings are top of mind.
Leo was interested in saving while at university, as he faced a tighter budget while living on student loans.
“If I can keep track of that as much as possible, I can still really enjoy myself, get out, go to dinner and all that stuff, while also saving a little bit for either big things like vacations, or for the future,” he added. He said this is money.
He now pays his own pension, benefits from his company’s pension scheme, and contributes an extra percentage of his income every time he gets a pay rise, which his employer then matches.
“I can build that into the life I want to live, I can go out with my mates and all that, but I can still add that 1 per cent every time I get a pay rise.”
“I try to add one-time contributions every month,” he added. “I have a spreadsheet where I track all my expenses and income, so at the end of the month I can see if I have £400 left or £100 left. Then I can base my contribution on that.
I think all that data and those statistics (about the current cost of living) push you one way or another. Either “I’ll never be able to afford it, so what’s the point,” or “That’s a terrible statistic, I’m going to have to make a tragic spreadsheet and create it that all my friends will laugh at.”
On the other hand, Dr. Nisha Prakash from the University of East London said: “In general, Generation Z are soft savers. They prefer to spend on accumulating experiences rather than saving for retirement.
Last year, Jane Tait set up Rise Lettings Group to invest in property ahead of her retirement
However, the pandemic has brought about a significant change in how Generation Z and Millennials perceive the utility of money. With lockdowns confining families indoors, young people are at risk of reduced savings amid economic uncertainty.
I’m not sure if this trend will continue even after the economy stabilizes. I think once growth starts, the focus on young earners will shift back to consumption.
Of course, paying a pension is not the only way to save for retirement. Jane Tate, 41, has not paid into a pension since 2010, but not because of a lack of interest in building a future for herself and her children.
“It’s less that I can’t be bothered, and more that I don’t trust retirement plans,” said Jane, who is a director of her own company, Rise Learning Group. They create a limited amount of money that will run out when you withdraw from it.
“On the other hand, investing in real estate means that the value of the pot will continue to rise, I will make money from the rentals of these properties, and the value of the pot will continue to grow.”
Last year, Jane set up a property lettings business, and entering her 40s has ‘pushed’ her into the business based on the interest she’s always had in property.
“I wouldn’t be surprised if many self-employed people don’t think about their pensions, or don’t pay into them,” she added. “I think most self-employed people will have an alternative pension plan, or won’t have a plan at all.”
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(tags for translation) Daily Mail