Published on:
09 September 2024
In a survey of 2,000 UK 18 to 25-year-olds, MaPS found that one in three (29%) who are currently working have never contributed to a workplace or private pension.
Among savers (87%), ‘milestone planning’ was the top reported savings priority for young people, with half of 18 to 25-year-olds (51%) saying they are saving to buy a property, get married, or similar life events.
Leaving planning for retirement in 6th place, with just over one in eight (13%) reporting that they are saving for this.
MaPS highlights research from the Institute and Faculty of Actuaries (IFoA) which shows that contributing to your pension age 35 instead of 25 could result in a £500k pension pot instead of £800k, a detrimental loss of over £300k for a retirement pot.
Jackie Spencer, Head of Money and Pensions Policy at the Money and Pensions Service, says:
“We understand that not everyone can regularly contribute high amounts to their pension.
“It’s encouraging that our recent data shows that 71% of young people in full-time employment are contributing to a pension. This likely demonstrates the positive effect of the workplace automatic enrolment, and we’d encourage young people starting new jobs to contribute to their workplace pension.
“It's important that young people starting out in their careers know that even a small contribution each month can make a difference to their retirement pot, and something is better than nothing.
"For those currently self-employed or not in full-time employment, try to put money aside where you can for retirement and consider a personal pension. When young people do reach the stage of full-time employment, we’d encourage taking advantage of auto-enrolment into your pension if you can.”
MaPS understands that not everyone is able to pay into a pension, particularly if they are saving money for other reasons, but it’s important to be well informed when making financial decisions.
When you are part of a workplace pension scheme, you may be eligible for employer contributions and some of the money that would have gone to the government as tax goes towards your pension instead.
MaPS’ MoneyHelper website has plenty of free and impartial guides to offer support, including our pension calculatorOpens in a new window and a webchat tool where young people can access pension guidance.
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