A large number of younger people are putting off retirement saving in the hope of receiving an inheritance, according to research from Standard Life.
The findings, part of Standard Life’s Retirement Voice report, revealed that 24% of Generation Z say they’re not focussed on retirement because they expect to receive money or property in the future.
A similar number (23%) of millennials also share this view.
However, Standard Life warned that various factors, such as people living longer, increasing care needs, and rising living costs, mean estates may be more stretched than younger generations anticipate. Furthermore, the Government’s planned 2027 changes to inheritance tax, which will bring unspent pensions into scope, could also reduce what is passed on.
Dean Butler, managing director for retail direct at Standard Life, said: “It’s understandable that younger people may not see retirement as an immediate priority, especially when everyday costs feel more pressing, and they have more immediate financial goals like saving for a house deposit.
“Many may be banking on future financial support and while it’s true that Millennials and Gen Z are set to benefit from a significant wealth transfer from Baby Boomers over the coming years, inheritance is rarely guaranteed and it could come later in life or not be as much as expected.”
Butler said younger generations should focus on building their own retirement pot over time and by starting early and contributing little and often, people can take advantage of tax efficiency, employer contributions and compound investment growth.
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