Young people have a bad reputation when it comes for saving for their retirement and have hardly been top of advisers’ client wish lists. But recent research suggests it might be time to reconsider and give youth a chance.
A survey published by the National Association of Pension Funds (NAPF) last week showed young people were committed to increasing the amount they saved towards their pensions and were concerned about their choice of pension fund.
Young people show willing
Just over half (53%) of the respondents aged 25 to 34 planned to increase the amount they saved towards retirement in the coming year.
By contrast, only 26% of those aged 45 to 54 said they would save more, and the survey average was just 38%.
Rob Forbes, partner and chartered financial planner at London-based Plutus Wealth Management, says young people are not actively avoiding pensions. ‘40% of our client base is under 38, a lot of these guys don’t need the complex advice that we’re offering but still want to save effectively,’ he said.
He was sceptical of the NAPF survey, arguing that most people would say they were committed to saving when asked, only to find that resolve may be less strong when confronted with competing options for their money.
Many young people are unlikely to be in a position to afford an adviser, but with the advent of auto-enrolment and the heavy online presence of the Money Advice Service (MAS), they will be subjected to more information on financial issues than before.
Many advisers have yet to work out how they can engage with auto-enrolment and are openly suspicious of the MAS, but both initiatives could generate leads.
‘The ’80s generation faces huge financial pressures in paying off student debt or building a deposit on a home, but many are thinking about saving more and not opting out of auto-enrolment,’ she says.