Raymond James research suggests younger savers are taking a more proactive approach to retirement planning, with many increasing pension contributions over the past year.
More than a quarter of mass affluent UK adults (29%) have increased their workplace pension contributions over the past 12 months, according to new research from Raymond James, with retirement aspirations emerging as the primary driver.
The study found that 24% of respondents had also increased contributions to a personal pension during the same period, while 9% had made a lump-sum pension contribution.
Younger savers appear to be driving much of this activity. According to the research, 37% of both Gen Z and Millennial respondents said they had increased workplace pension contributions over the last year, compared with 28% of Gen X and 7% of Baby Boomers.
The findings come as debate continues around the adequacy and sustainability of retirement provision, highlighted by the publication of the latest Mercer CFA Institute Global Pension Index.
Among those who increased workplace pension contributions, 40% said the main reason was to achieve their “dream retirement”.
Other motivations included securing better returns than cash savings (36%), reaching retirement goals faster (33%) and taking advantage of pension tax relief (30%).
Harry Bell, director of financial planning at Raymond James, said: “It is encouraging to see savers taking control of their financial futures, with younger generations leading the charge.
“With nearly three in ten people ramping up their pension payments and more than a third of Gen Z and Millennials doing so, we are witnessing a shift towards proactive wealth creation earlier in life.
“This is especially critical with the state pension legislation up for debate.”
The research also points to a growing focus on investment-based saving. More than a quarter (28%) of respondents said they had increased pension contributions to focus more on investments than cash savings.
Bell said: “This trend reflects a broader recognition that building wealth requires long-term commitment. Over a quarter (28%) of Brits are intentionally shifting away from traditional cash deposits to focus on investments that offer genuine growth potential against inflation.”
The study also explored attitudes towards using pensions as a means of passing on wealth. 15% of respondents who increased contributions said they had done so with the intention of eventually passing assets to relatives.
However, Bell warned that forthcoming changes to pension inheritance tax treatment may prompt some individuals to review their approach.
He said: “Crucially however, the data shows that pensions must be re-evaluated as personal retirement income rather than a tax-free estate planning tool.”
The findings suggest that, while retirement remains the principal focus for most pension savers, contribution decisions continue to be shaped by a combination of long-term income needs, investment considerations and wider planning objectives.
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