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Category: Retirement Date: 12/27/2012
Private pensions may cease to exist by 2050 as young people favour short-term savings over long-term investments, according to the Centre for Policy Studies (CPS).
High living costs, existing debt and low wages, combined with low returns and the rising cost of running a pension, has meant many young people are placing their money in savings accounts such as ISAs, which allow them to access funds at short notice.
Uncertain economic times are also believed to be dissuading a large number of people in their twenties and thirties from investing over a 30 or 40-year period.
It is thought that only 12% of people aged between 25 and 34 are paying into a private pension, despite the Government's efforts to boost retirement saving by way of a tax relief incentive.
A lack of demand for private pension schemes is predicted to spell disaster for the ailing pensions industry, which has encountered a testing few years since the financial crisis began.
Michael Johnson, a research fellow at the CPS, said: "Pensions will cease to exist before 2050. I don't say that lightheartedly.
"They will cease to exist for a variety of reasons but the one at the top of the tree is that if you go and talk to people in their 20s and 30s today the word pension does not resonate with them."
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