Despite the general consensus being that young people aren't preparing sufficiently for retirement, new research from Aegon has found that young employees are actually ready to save for later life but a lack of opportunities is preventing them from doing so.
The "Changing Face of Retirement: The Young, Pragmatic and Penniless Generation" report found that employed young adults between the ages of 20 and 29 are prepared to take responsibility for their own financial future, meaning any future shortfalls are likely to be the result of lack of opportunity rather than lack of will.
But, it also found that they'll need the support of employers, the Government and pension providers in order to achieve their retirement goals.
Fifty-nine percent of young adults surveyed expect to be financially worse off in retirement than their parents with 37% believing that they'll fall short of their retirement needs, with many being pessimistic about their long-term financial future and when they can retire.
Despite this pessimism, an encouraging two-thirds of young employees are committed to saving for their retirement – 25% are already habitual savers who always make sure they're putting money away for their future whilst 41% are aspiring savers who intend do so, and a further 57% believe that having retirement savings is important.
Perhaps equally as encouraging, many young employees are actively interested in receiving financial advice and education, with 26% saying it would encourage them to save more for their retirement.
This suggests that many younger employees are prepared to rake responsibility for their own retirement, having accepted the reality of the current pensions crisis.
If they're to meet their savings goals, however, additional support could well be necessary. Eighty-seven percent believe that a workplace pension scheme with employer contributions would be a key deciding factor when choosing any future job with it encouraging them to match contributions for a bigger nest egg, whilst clarity is an ongoing theme with 24% believing that access to simpler investment products would increase their desire to save.
The Government could have a part to play as well, with 34% of young employees stating that more generous tax breaks on long-term retirement and savings plans would be a key motivator for saving.
Richard Eagling, head of pensions at Moneyfacts, comments on the findings: "The fact that young adults are willing to take more responsibility for their own retirement and aspire to save is welcome news, but this is only half the battle in the quest to fund for a comfortable retirement.
"In reality, the high levels of youth unemployment and student debt facing this generation present unique challenges that the Government, pension providers and employers needs to address if these retirement aspirations are to be realised ."
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