Research published by the ABI shows that a majority of young people are not planning for their long-term financial future.
The research shows that less then half of under 30s are saving for a pension. This compares with over 70% of people born in the 1960s who had some kind of pension provision by the time they reached 30.
Joanne Segars, head of pensions and savings at the ABI, says: “It's understandable that with all the financial pressure young people face today, they find it difficult to plan decades ahead. But this does not mean that the government, savings industry and employers must simply give them up as a lost cause - it's entirely the opposite.”
“The government must highlight incentives such as tax relief, the savings industry must go to greater lengths to explain pensions and employers must encourage employees to save. In fact one of the only differences between savers and non-savers was that savers tended to belong to pensions schemes that also received an employer contribution.”
Any evidence of saving tended to concentrate on the short-term and be aimed at specific goals such as a holiday or a wedding. The majority of young people displayed little awareness of the importance of saving for retirement and securing their long-term financial future. Even when forced to consider this option, they systematically underestimated the amount needed to generate a reasonable retirement income.