Generation differences in pensions

Updated: 
The 1980s generation are more "switched on" to pensions than many of their older colleagues and are also more determined to save extra in the coming year, research suggests.

Despite the pressures of student debt or trying to get on the property ladder, people aged between 25 and 34 are more likely than many older workers to be planning to increase their retirement saving over the next year, the National Association of Pension Funds (NAPF) found.

More than half (53%) of the younger workers surveyed said that they plan to put more money by for their later years over 2013, compared with 26% of 45 to 54-year-olds. Across the board, 38% of people plan to increase their retirement saving this year.

Meanwhile, almost half (43%) of those aged 25 to 34 said they had talked about pensions more in the past year than they had done previously. Only those much closer to retirement aged between 55 and 64 showed more interest, at 56%.

Half of the 1980s generation (47%) said they regretted not taking a bigger interest in retirement saving at an earlier stage, marking the highest proportion of any age group.

The NAPF described the results of its survey as "surprising" and said that in the past it has found that interest in pensions increases as people become older.

It put the rise in awareness among young people down to the debate sparked by a huge pension shake-up currently under way. The overhaul includes plans for state pension reforms to simplify the current system as well as the Government's landmark automatic enrolment scheme, which started last autumn and will eventually place up to 10 million people into workplace pensions.

Much debate has also been taking place over how to make pensions clearer to understand and give people confidence in retirement saving.

Of the 25 to 34-year-olds surveyed, 48% are already a member of a workplace pension. Of the young people who are not in a pension scheme, 65% said they were likely to stay in their new pension when they were auto-enrolled, which is higher than the average of 50%.

But there were also causes for concern, with 44% of younger people who are in a pension saying they do not know if it is a good one or not, compared with 32% on average.

Joanne Segars, chief executive of the NAPF, said: "These results are counterintuitive but encouraging. 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. Their retirement might be decades away, but it looks like many younger people are taking their heads out of the sand when it comes to pensions." More than 2,000 people were surveyed for the NAPF's workplace pensions survey in February.

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