The general assumption that the younger generation has a "live for today" mentality appears to be untrue, with research finding that many are also looking to the future. Indeed, Scottish Widows found that many are actively looking forward to a greater later life with impressive ambitions for their future income, yet concerns remain over whether they'll actually be able to achieve their goals.
The research found that 75% of millennials surveyed expect their quality of life to be maintained or even improved in retirement, and they even expect to retire early (at an average age of 63) in order to enjoy their later life to the full. They have extensive plans, too, with 59% expecting to take regular overseas holidays, while 48% want to spend their time on cinema and theatre trips.
A further 28% plan to treat themselves to new clothes and a similar proportion (26%) expect to eat and drink out regularly – and it isn't only the material things that they're aspiring to, either. Many want to develop new skills in retirement, such as the 24% who plan on learning a new language and 19% who hope to write a novel. Not only that, but some have even loftier ambitions, with 24% planning on building their dream home in retirement and 15% expecting to start their own business.
… but will it be that easy?
While it's certainly encouraging to see that many are actively planning for their future, there are concerns that it may be pie in the sky rather than set in stone, particularly when it comes to the level of income they'd need to fund such ambitions.
The Scottish Widows study found that, while the younger worker is typically able to set aside £214 in monthly pension contributions, only 14% believe they're saving sufficiently. A further 28% say they have no solid plan for funding their retirement, which could put many of their goals at risk of remaining dreams rather than becoming reality.
This concern is further highlighted by additional research from the Pensions and Lifetime Savings Association (PLSA). They found that, while 18-35 year-olds actively want to save for retirement, their long-term plans are curbed by necessity: the cost of living (48%) and low salaries (43%) are preventing them from saving sufficiently.
Their hearts are definitely in it though, with 51% of respondents feeling that they get more satisfaction from saving money than spending it, while 77% feel pressure to save for the future and 53% disagree with the idea that they tend to live for today and let tomorrow look after itself. Despite the fact that over half (57%) don't have any debt (excluding student loans) and 65% don't acquire any on a monthly basis, being able to save to sufficient levels is clearly a struggle.
"18-35 year olds are no different to many people – they want to save for a secure future but short-term financial pressures get in the way," said Joanne Segars of PLSA. "It's not surprising that without help, this group prioritises short-term over long-term saving."
Get a long-term view
It may be difficult, but if you want your aspirations to match up with reality, it's vital to start your retirement savings as soon as you can. Automatic enrolment will be the best way to do this – everything's organised by your workplace so you needn't lift a finger, and your contributions will be boosted by tax relief as well as contributions from your employer, so it's win-win!
The sooner you start, the more you can accumulate over your working years, with compound interest and investment growth combining to help boost your pot significantly. And, because contributions come straight from your salary, you won't even notice the amount missing from your bank account! So, get signed up if you haven't already, and hopefully your greater later life will be more achievable than you think.
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