Young people need to 'change their attitude' towards retirement saving
More than one in three people (35 per cent) aged between 25 and 34 expect their pensions to come from personal savings and investments, rather than from the government, but few of them are saving enough.
A survey from Axa highlights the urgent need for greater education and a change of attitude towards retirement saving among the younger generation.
This age group are also more unwilling to work longer, with 48 per cent preferring to save more rather than retire at an older age, but with a rising retirement age, predicted to increase further in the future, that might not be an option for those who do not save enough.
In contrast to the babyboomer generation, which generally expects to rely on the state for pension support, just one in five younger people expect to survive solely on a state pension, however a lack of information and guidance means not enough young people are saving, says Axa.
Younger people associate the financial burden of saving as the biggest characteristic of retirement and Axa Wealth’s head of pensions Mike Morrison says Brits are ‘out of the savings habit’. He says younger people in particular have other financial concerns, such as student loan repayments and house deposits, and are not putting away money for their pension.
But he says it’s never too early or late to start saving for your pension and no amount is too small. He advises signing up to a company pension, if you can, and also using an Isa to put away savings you might want to access before retirement.
‘There are no set guidelines on how much you should be saving but I advise working out how much you would like as an income when you retire and working back from there,’ he tells Money Observer.
‘It should be a priority of the government to provide more information to younger people through education and encourage them to start saving as soon as they can.’