Almost all (95%) of employees aged between 22 and 36 did not feel confident about being on track to reach their retirement goals and were looking to their employers for help, the State Street Global Advisers survey found.

And more than half of Generation Y workers would feel incentivised to save more if their employer contributed more.

Findings from Barclays Corporate and Employer Solutions research also highlighted the various approaches needed to successfully target different generations of workers.

It found that 87% of employees from the younger Generation X and Generation Y were left dissatisfied by their employers’ benefits offerings, believing they were not sufficiently flexible to meet their financial and personal needs.

Other significant findings from the State Street survey included:

• Nearly 60% of younger respondents were more likely to invest in property and increase personal investments in order to generate an income for retirement,
• More than 50% would prefer to invest in ISAs in order to generate retirement income,
• 45% of those who said they were not confident in their pension provision blamed poor schemes, insufficient time and a lack of existing savings,
• Young people had by far the lowest level of understanding of how their savings were invested – only 27% compared to 54% across all ages claimed to have an understanding of their default fund,
• Four out of five people surveyed felt that an investment in the stock market was only marginally safer than gambling,
• As a result, nearly 70% of Gen Y respondents contributed less than 6% to their defined contribution (DC) scheme annually; significantly below what might be considered adequate,
• More than 80% of young people had no plans to change the amount they contributed to workplace pension arrangements in the next year,
• Meanwhile, the average age at which 22-36 year-old respondents still expected to retire was 63,
• Nearly one in five households with young and middle aged adults had less than £5,000 saved for their retirement.

Managing director and head of UK DC Nigel Aston said: “Currently, Generation Y sees little value in investing in a workplace pension, and is looking elsewhere to secure a retirement income.

“We need to learn from the investment products that are attracting Generation Y’s attention. Many of them communicate the benefits and ease of investing, and we need to help scheme sponsors pass on the same messages about DC. This research indicates that employers occupy a position of real trust with their staff; they can leverage that relationship to drive better workplace savings outcomes,” he added.