Six in 10 (59%) UK millennial employees have admitted that their current life stage means they struggle to save for retirement, compared to 48% of Gen Z and 39% of Gen X staff.
According to new research by long-term savings and retirement business Phoenix Group, among 4,000 UK adults, 25% of millennial respondents in their late 20s to early 40s revealed that income change is the main reason, with a similar proportion (24%) citing childcare responsibilities. Millennials were found to be twice as likely as any other age band to cite childcare as a reason for not saving for retirement.
Just one in five (20%) said paying into their pension is a priority, with short-term financial goals seen as more important. Immediate financial pressures have led them to decrease (7%) or stop (7%) pension contributions in the last year.
The research highlighted that life events millennials face, such as parental leave, childcare commitments, becoming a homeowner and career change or break, can have a huge disruption on their ability to save. Women are disproportionally impacted as they are more likely to take on childcare and caring responsibilities.
Patrick Thomson, head of research analysis and policy at Phoenix Insights, said: “The research finds some millennials have decreased or stopped pension contributions entirely but the numbers doing this remains low, underlining the benefits of people being opted-in to pension saving as default. However, there is a risk that if people don’t readjust their savings once they have got through a short-term financial challenge they will reach retirement with much less than they’d hoped for.
“As many as 17 million people are not saving enough for the retirement they expect, so it is important people take steps to address saving gaps where possible. Employers also play a vital role in supporting their staff to maintain retirement saving at key life stages, including continuing employer contributions during parental leave.”
