58% of 18-35 year olds aren’t currently saving into a workplace pension but 54% would start saving or would save more if they could access some of the money to help fund a deposit for their first home.
The research from workplace pensions provider Now Pensions comes as the Budget pension reforms come into effect on 6 April which will provide greater flexibility to over 55s in terms of how they access their pension pot at retirement.
The main reason those surveyed give for side-stepping pension saving is that they are prioritising saving elsewhere cited by 43%, with 25% saying that they simply don’t have enough money left at the end of the month. For 14% of those surveyed, their debt is too much of a burden to allow saving.
As a result, 61% say they are concerned or very concerned that they won’t have enough money when they retire.
52% of those that don’t currently save would begin doing so if their employer offered a more generous contribution, while 42% would start putting money aside if a kick start payment was offered by the government.
25% say being able to access savings during times of financial hardship or when facing serious illness would encourage them to save or save more into a workplace pension.
Morten Nilsson, CEO of Now Pensions, said: “The nature of pension saving is fundamentally changing. With over 55s being afforded greater flexibility with how they access their pension pot at retirement, perhaps now is the time to think about whether more flexibility should be extended to young savers to help incentivise saving.
“With so many pressures on young people’s finances, it’s understandable that pension saving can fall down the priority list.
“The average deposit paid by a first time buyer last year was a staggering £29,218 putting home ownership out of the reach of many. By giving young savers the option to access a portion of their pension fund to get on the property ladder, the government could simultaneously boost pension saving and ease the financial pressure on first time buyers.
“A similar initiative has worked well in New Zealand with savers in the country’s KiwiSaver workplace pension scheme having the option to receive a first home subsidy after three years of saving.”