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Millennials and Gen Z expect to retire earlier than the over-55s but will need more money

Millennials and Gen Z expect to retire earlier than the over-55s but will need more money
Anna Sagar
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Anna Sagar

Millennials and Gen Z expect to retire earlier and to need more money to support their retirement compared to those aged over-55, a report has found.

According to research from Canada Life, younger people aged 18 to 34-year-old are expect to retire by 60 on average despite the state pension not kicking in until 68. However, those aged 55 and over expect to retire at the age of 66.

Millennials and Gen Z believe they would need an average of £35,000 per year when they retire, but those aged over 55 will need £25,000 a year.

Over half of those aged 18 to 34-year-olds are confident they will be able to save enough by the time they retire whereas only 39% of over-55s feel the same.

Around 19% of over-55s say they have no plans at all for their retirement.

The way retirement is funded also varied by age, with nearly three quarters of over-55s expecting to rely on state pension compared to just over a quarter of 18 to 34-year-olds.

A third of younger groups expect to use workplace pensions and savings and cash ISA and nearly a quarter will look to investments to back their retirement.

Around 14% of Brits will use a side hustle to fund their retirement pot, which goes up to 19% of those aged 18 to 34-year-olds.

‘A false sense of security’

Tom Evans, managing director of retirement at Canada Life, said: “It makes sense that attitudes to retirement will differ depending on age and generation. Underlying optimism of Millennials and Gen Z may be in part due to the introduction of auto-enrolment, and potentially an expectation of inheritance.

“Whilst there is nothing wrong with aspiring towards an earlier or a more extravagant retirement, it’s important not to be lulled into a false sense of security.”

He added: “No matter whether you’re a Boomer, Millennial, Gen Z or otherwise, remember that it’s never too early or too late to start planning. The government portal has a useful State Pension calculator as a starter. A professional financial adviser could also be a key port of call, helping you to plan and ultimately feel empowered about your financial future.”