Kimberley Dondo finds younger workers are positive about old age
Millennials may be facing stagnating wages and difficulties getting onto the property ladder but they are surprisingly upbeat about funding their retirement.
According to Network Research’s Retirement Attitudes Programme (RAP), 52% of those aged 22-39 are confident they will receive a reasonable income in old age, compared to 42% of those aged 40 – 60.
This confidence stems from the launch of auto-enrolment, which has put more than 6 million UK adults into pension schemes.
The most common reasons given for this sense of security where the fact that younger workers had “started saving early enough” (38%) and had “access to a workplace pension” (35%).
Although just a third (32%) of 22-39 year olds said they would put any spare cash they had at the end of the month into their pensions, older workers were even less likely to do so.
However minimum contribution levels are still set at a low level (currently 1% employer and 1% employee) and the majority of employers and employees are adhering to this.
Unless contributions increase significantly millennial’s confidence in their pensions will prove misplaced.
And the vast majority of under 40s have other concerns when it comes to their finances that overshadow pensions.
The burden of rent, household bills and ever-growing debt take precedence, with 84% 22-39 year olds likely to prioritise saving for a home deposit if they ran into financial difficulty.
But millennials still see saving into a pension as the best way to fund old age. Some 56% of 22-39 year olds said this was a good ways of providing a retirement income, compared to 52% who said savings, and 45% property.