Millennials are putting pension saving high up their list of workplace priorities, according to new research from Prudential.
The insurer found that 57% of people in their first 10 years of work considered the quality of their current employer’s pension scheme before deciding whether to take the job and will also assess any potential new employer’s pension scheme before moving jobs in the future.
This year is the 10th year of Prudential’s annual Class of… research into the financial plans and aspirations of people planning to retire in the year ahead. To mark the anniversary Prudential has interviewed a cross section of people who have started working in the years since Prudential’s Class of 2008 retired.
The results found that 38% believe their retirement saving efforts are on track to help them match the living standards of today’s pensioners when they give up work themselves. However, 34% acknowledge rising living costs and accept that the amounts they are saving today simply won’t be enough to support a comfortable retirement.
Prudential found that millennial women are more realistic than their male colleagues about the challenges of matching the living standards of their retired grandparents in a world where the responsibility for pension provision continues to shift further away from employers and the government and onto the individual. 32% of the women surveyed were confident their retirement incomes would match that of older generations, compared with 52% of men.
Many younger workers are considering making personal sacrifices to help fund a comfortable retirement – 31% say they will consider cutting back on spending for the next 10 years to focus on their pension and 30% are considering a move to a less expensive part of the country. Meanwhile, 29% think a consultation with a financial adviser could help to make sure they understand their savings and investments better.
Despite all the good intentions around saving and planning for their retirement, 54% of the younger generation of workers admit they are envious of the retirement plans and finances of those who have already given up work or are about to do so.
Kirsty Anderson, retirement spokesperson at Prudential, said: “It’s a welcome surprise to see many younger workers thinking about planning and saving for their retirement. The success of automatic enrolment means that many of them will now be saving into pension schemes for the first time, but what these figures show is that they are going above and beyond the bare minimum required and setting aspirations to match their grandparents’ quality of life when they give up work themselves.
“But favouring one employer’s pension scheme over another and setting goals for their quality of life in retirement are only the first steps for younger pension savers.
“Pension saving is for the long-term and the members of the millennial generation who are most likely to be best placed when they retire will be the ones who have saved as much as possible into a pension for as long as possible in their working lives.”
Prudential’s new research also found that 30% of younger workers have yet to consider how much income they will need for a comfortable life in retirement, while 33% say they will consider moving abroad if it helps to secure a more comfortable life when they give up work.