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Pensions warning issued for millennials and Gen Z

by LLB Editor
26th Jul 21 9:08 am

Brits aged 18-40 are failing to prioritise their pensions, instead investing their hard-earned cash in dream holidays, material goods and property, according to the latest data from money.co.uk. 

The new report, which analyses the different money priorities for each generation, has revealed that only Gen X savers (aged 41-56) view pension plans as one of their top three financial priorities.  

Despite being the biggest savers, Brits falling into the Gen Z category (18-24), say that their biggest financial priority is saving for a home, followed by money to spend on material goods, and saving for a dream holiday. 

When it comes to Millennials, holidays are the single biggest priority, with almost 40% of 25-40 year olds saying it was their primary financial focus, followed by money for material goods and saving for a home. 

James Andrews, personal finance editor at money.co.uk, said: “Everyone’s financial situation is different, but the earlier you start paying into a pension, the better result you’ll get at retirement.

 

“That’s because if you don’t start saving until you’re older, you’ll need to put far more away to catch up – as the money has less time to grow.

 

“Once you pass the automatic enrolment earnings threshold (currently £10,000 a year or £192 a week) 5% of your pre-tax salary goes straight into your pension to be topped up by your employer, unless you actively opt out or your firm has a more generous scheme in place.

“But while that might make some younger workers feel secure, remember that every extra pound you save a month in your 20s and 30s can be worth hundreds by the time you retire – but the later you leave it the less time that money has to grow.”

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