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Retirement

Saving for the future ‘mission impossible’ for young adults

Tahmina Mannan
Written By:
Tahmina Mannan
Posted:
Updated:
28/08/2013

A third of Brits believe ‘Generation Y’ – young adults aged between 18 and 31 – will struggle the most to save for retirement.

Two thirds also think that baby-boomers -those aged between 51 and 71 – will be the last generation able to retire with sufficient savings.

According to the survey by workplace pensions provider NOW: Pensions, over half of ‘Generation Y’ expect to be worse off than their parents in retirement, with the majority (68%) blaming rising living costs and a less generous state pension (57%).

Over a third (38%) think increased longevity will put a strain on their retirement income.

Nearly a third said they don’t anticipate being able to cash in on property to fund their retirement, with over a quarter believing that the burden of student debt will hold them back.

Morten Nilsson, CEO of NOW: Pensions, said: “Sky high rents, the rising cost of living and stagnant wages have all made saving for the future near mission impossible for Generation Y.

“But, with final salary pension schemes relegated to the history books and state pension provision just £110 per week, saving for retirement has never been more important.

“Automatic enrolment into workplace pensions will help those that are struggling to save, get into the savings habit but it’s important that employers and pension providers drive home the importance of staying in the scheme.”

Despite the bleak outlook, the survey found Generation Y seems unconcerned about their long term financial future, with only 37% saying they are worried about funding their retirement, compared to 45% of baby-boomers.

This sentiment is clearly reflected in their savings habits, with almost half currently failing to save on a regular basis.

However, the survey found that this generation expect to fund the shortfall in retirement savings by saving or investing (56%), working longer (55%) and increasing pensions contributions (30%).