Young employees plan to save more for retirement

Young employees are more engaged with pensions than older colleagues and plan to save more, according to research by the National Association of Pension Funds (NAPF).

The NAPF workplace pensions survey, which had 2,050 respondents, found that more than half (53%) of those aged 25 to 34 intend to increase the amount they save towards retirement in the coming year.

This is compared to 26% of respondents aged 45 and 54 who plan to do the same. The survey average stood at 38%.

The research also found:

  • 47% of respondents aged 25 to 34 said they wished they had taken more interest in saving for retirement at an earlier stage. This was the highest of any age group and above the survey average of 42%.
  • 43% of those aged 25 to 34 said they had talked about pensions more in the past year than in previous years. Only those much closer to retirement, aged 55 to 64, showed more interest (56%).
  • 48% of those aged 25 to 34 are already a member of a workplace pension scheme.
  • 65% of those aged 25 to 34 who are not yet in a workplace pension said they are likely to stay in their new pension when they are auto-enrolled by their employer. This is markedly higher than the survey average of 50%.
  • 44% of respondents aged 25 to 34 do not know whether their pension is a good scheme or not, compared with 32% across all age groups.
  • 45% of those aged 25 to 34 are not comfortable with their approach to saving for retirement, which is higher than the survey average of 37%.

Joanne Segars, chief executive of NAPF, said:“These results are counter-intuitive, but encouraging.

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“A few years ago these young workers were nicknamed the ostrich generation, because they knew they needed to plan their retirement, but were doing nothing about it.

“We still have a long way to go to raise interest among workers in their early 20s, but the key thing is that the earlier you start saving, the better. The UK needs to do much more to save for retirement.”