Many 29 to 44-year-olds aren’t actively thinking about planning for retirement, new research has found.
According to investment platform InvestEngine, 51% of millennials rarely think about their pension.
That compares with 38% of Gen X savers and 41% of Gen-Z savers.
Millennials don’t understand pensions
The study also highlighted a deeper issue: a widespread lack of understanding about how pensions work.
Over a third (37%) of millennials admit they don’t understand how pensions operate, while 45% don’t realise they pay fees on their workplace pensions at all.
And worryingly, nearly a third of millennials surveyed believe that higher fees mean better-quality pension funds.
That’s a concern because higher fees can quietly eat into a person’s long-term savings, potentially leaving savers with thousands less in retirement.
Auto-enrolment has changed the mindset of millennials
“As the generation of auto-enrolment, millennials may simply have had fewer reasons to think about and engage with their pension,” said Andrew Prosser, head of investments at InvestEngine.
“But this has led to some alarming findings.”
Mr Prosser added that the lack of understanding around the long-term impact of “seemingly” low pension fees is a particular worry.
“Even small percentages add up to life-changing sums over time,” he commented.
Employees want help with retirement planning
The findings come after a study by reward and benefits consultancy Isio found that nearly one in four (24%) employees don’t feel confident making financial decisions.
As a result, many would like their employer to offer support and guidance on looking after their money.
For example, more than one in three (36%) employees said they’d especially welcome guidance on retirement planning and pensions.
Written by James Glynn
Senior Financial Content Writer
