High living costs threaten Gen Z and Millennials’ pensions
Younger generations are struggling to afford adding money to their pension pot, forcing many to be at risk of retirement poverty, new research has found.
According to a survey from fintech start-up Chest, two in five 18-34 year olds are failing to top up their pension pot as they face the challenge of spending more money on pressing priorities.
This includes buying a house, paying rent and saving to get married, all of which have become increasingly expensive in recent years.
According to Nationwide, the average price of a house in the UK was £271,079, in comparison to £265,375 the previous year.
Nearly 40 per cent felt uncertain and anxious about their retirement savings, with only 23 per cent hopeful that the amount they were on track to save would be enough.
Ali Adam, co-founder of Chest, said: “Despite being anxious about our financial future, battling the high cost of living means that we have nothing spare to put into a pension.
“There is a recession of trust towards pension companies, particularly for younger consumers.”
Engage younger generation
Young people are now calling for improved communication from pension providers and industry figures in order to help them meet their retirement goals.
Nearly 50 per cent of respondents wanted to know the amount needed to live comfortably in retirement, while 28 per cent wished for regular savings updates.
Similarly, a third of Gen Z and Millennials requested more accessible information on pensions, as young people continue to turn away from traditional advice offerings.
Jason Murphy, co-founder of Chest, added: “Pension communication fails to engage younger generations, it’s overly complex and difficult to understand.
“[Gen Z and millennials] feel financially illiterate, but advice is seen as inaccessible due to cost.”
The growing advice gap has caused people to look elsewhere to source financial guidance, with one in three opting for social media and influencers, despite a lack of regulation and personalised advice.