Young workers born in the 1980s are more ‘switched on’ to pensions than older colleagues and plan to save more, despite the pressures of student debt and buying property, a survey for the National Association of Pension Funds (NAPF) shows today.
Half (53%) of the respondents aged 25 to 34 plan to increase the amount they save towards retirement in the coming year. By contrast, only 26% of those aged 45 to 54 say they will save more, and the survey average was just 38%.
Surprisingly, half of the 1980s generation (47%) said they wished they had taken more interest in saving for retirement at an earlier stage. This was the highest of any age group and above the average of 42%.
And almost half (43%) of those aged 25 to 34 said they had talked about pensions more in the past year than in previous years. Only those much closer to retirement aged 55-64 showed more interest (56%).
The unexpected results came in the latest NAPF Workplace Pensions Survey of over 2000 people, run by pollsters Populus. In its survey work the NAPF usually finds that interest in pension issues increases with age and that younger people are much less engaged.
It thinks today’s findings reflect a growing awareness among younger people that has been driven by recent public debate about pensions, changes to the state pension age, and new rules to auto-enrol all workers in a pension.
Joanne Segars, Chief Executive, NAPF, said:
“These results are counterintuitive but encouraging. A few years ago these young workers were nicknamed the ostrich generation, because they knew they needed to plan their retirement, but were doing nothing about it.
“Their retirement might be decades away, but it looks like many younger people are taking their heads out of the sand when it comes to pensions.
“The 80s generation faces huge financial pressures in paying off student debt or building a deposit on a home. That so many are thinking about saving more and sticking with their new workplace pension is a really positive development.
“There has been a lot of public debate about pensions and retirement over the past few years, and that has fuelled awareness among younger people. Many have also heard about the Government’s drive to automatically put all workers in a pension.
“We still have a long way to go to raise interest among workers in their early 20s, but the key thing is that the earlier you start saving, the better. The UK needs to do much more to save for retirement.”
Of the 25 to 34 year olds covered by the survey, 48% are already a member of a workplace pension. 65% of those who are not yet in a workplace pension say they are likely to stay in their new pension when they are auto-enrolled, which is markedly higher than the average of 50%.
But the survey also highlighted causes for concern. 44% of the 25-34 group do not know whether their pension is a good one or not, compared with 32% on average. And 45% are not comfortable with their approach to saving for retirement, which is higher than the survey average of 37%.
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