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Darren Philp has been quoted in the Young Money 2015 report, which is out today.
“We shouldn’t really be shocked that 18-25 year olds are not thinking about their retirement yet. After all, they are perhaps less than a third of their way towards retirement – if such a concept still exists when they get there.
“Financial priorities change over time. If young people are saving it’s more likely to be for shorter term objectives such as a holiday, for study, a car or a deposit on a first home. Unlike earlier generations, their disposable income will not increase for quite some time. Certainly not once they’re on the housing ladder, and the kids have come along. Trust me, I know!
“We’ve recently done some research which shows that people in general, not just Generation A, really don’t understand pensions. Despite this, it’s actually quite encouraging to note that only one in five felt completely disengaged as a result.
“This might be because a greater percentage of younger than older people have been brought into pension saving for the first time by auto-enrolment.
“The next challenge will come when minimum contributions rise. Seeing 1% of your salary disappear each month might be bearable – the trick will be to keep people saving when these go up. That’s where messaging comes in, and it is down to all of us to support the saving message. We need to get the message across that saving more, earlier, means saving less for the same outcome – let investment growth do more of the work for you.
“If there’s one image that typifies Generation A, it’s of someone who is constantly on their smartphone. Tapping into this obsession seems like an ideal way of engaging people with their savings. That’s one of the reasons why we’ve supported a pension dashboard for so long. Seeing your savings in one place is a key way of making people more aware of what they have and what they need to do.
“For the youngest workers, retirement is a long way off, and probably getting further away. But if we can encourage them to save, then the day when they can slow down a bit might be an awful lot closer.”
For more from Darren, see the video below.
To read the full report, click here.