Survey shows low pension understanding among 18 to 29s
04 December 2014
A Survey by Barnett Waddingham, the UK's leading independent firm of actuaries, administrators and consultants, has revealed that 81% British 18-29 year-olds do not understand pensions and the majority are more likely to save money for their first home or clear debt over saving into a pension.
The firm's Helping Hands survey of over 850 members of the public, has gauged generational attitudes and perspectives towards pension saving and saving in general, by asking specific questions aimed at three different generations of savers: 18-29 year-olds, 30-49 year-olds and 50+ year-olds.
Of the three generations surveyed, those aged 18-29 appear to be the most disengaged with pension saving, with 81% stating that they do not understand pensions and 40% answering that they had never heard of auto-enrolment. Worryingly, 33% of this age-group admitted to having no pension savings at all.
When asked which was the most financially important to them, 49% of those 18-29 year olds surveyed rated saving for a house as the greatest priority, followed by 41% rating clearing debt, 6% said buying a car, while only 4% of those surveyed rated building a pension as the most financially important to them.
Other findings from the Helping Hands survey include:
* 75% don't understand pensions
* 70% stated that paying off their mortgage was their primary or secondary financial pressure which kept them up at night
* Only 4% would be very likely to pay for advice
* 80% are aware of the new pension freedoms introduced in the 2014 Budget
* Two thirds do properly understand their retirement options
* 75% do not view their pension investment as safe
Damian Stancombe, Head of Workplace Health and Wealth at Barnett Waddingham said: "Naturally, there are bound to be differences in attitude between generations but the Helping Hands Survey highlights that increasingly 18-29 year-olds are emerging as the ''Generation YOLO!'.
"It cannot escape anyone that a 25 year-old is going to have a fundamentally different view of what's important to a 40 year-old, and again to a 55 year-old. Employers and trustees need to significantly change the way they communicate with each generation regarding saving for retirement. To truly engage, they can no longer communicate collectively across generations when there are particular concerns that will be missed without communicating to individual age groups."
"It is telling that 18-29 year-olds rated saving for a house and clearing debt significantly above building a pension. A number of survey respondents commented that they didn't see the point in building a pension when they have existing debt to contend with. Ultimately true saving begins with debt management. To tackle the issue of engaging this age group with pension saving, new strategies to help the young clear debt need to be considered by both the government and employers.