Millennials focusing on workplace pensions
24 October 2017
Millennials are placing increasing importance on workplace pensions as part of their efforts to save for a comfortable retirement, according to the latest research by Prudential.
The research revealed that nearly six out of 10 younger workers in their first 10 years of employment considered the quality of their current employer’s pension scheme before deciding whether to take the job, and would assess a new employer’s pension scheme before moving jobs.
The study, part of Prudential’s annual Class of…research, found that two in five believe their retirement saving efforts are on track to help them match the living standards of today’s pensioners when they retire. However, over a third admitted that the rising costs of living would make it difficult for them to support a comfortable retirement.
Kirsty Anderson, a retirement expert at Prudential, said: “It’s a welcome surprise to see many younger workers thinking about planning and saving for their retirement. The success of automatic enrolment means that many of them will now be saving into pension schemes for the first time, but what these figures show is that they are going above and beyond the bare minimum required and setting aspirations to match their grandparents’ quality of life when they give up work themselves.
“But favouring one employer’s pension scheme over another and setting goals for their quality of life in retirement are only the first steps for younger pension savers. Pension saving is for the long-term and the members of the millennial generation who are most likely to be best placed when they retire will be the ones who have saved as much as possible into a pension for as long as possible in their working lives.”
The research found millennial women were more realistic than their male colleagues about the challenges in matching the living standards of their retired grandparents. Just under one in three of the women polled were confident they could rival older generations, compared with over half of men.
Across the sexes, nearly a third of younger workers said they would consider making personal sacrifices to help fund a comfortable retirement, including cutting back on spending over the next 10 years, with 30 per cent considering a move to a cheaper part of the country. However, despite the steps taken by the younger generations towards providing for their retirement, over half admitted they were envious of the finances of those in or on the cusp of retirement.
Prudential’s research also found that nearly one in three younger workers have yet to consider how much income they will need to live a comfortable lifestyle in retirement.
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