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It's often assumed that the younger generation doesn't think a whole lot about their financial future, yet research from Royal London shows that this assumption may be unfounded, with a lot of millennials willing to save far more for their pensions than many people think.
Automatic enrolment has encouraged a huge number of people to save for their retirement, and contrary to what may have been feared, few people are opting out of it. This is even the case for younger savers, with Royal London's research showing that 71% decided not to opt out of their workplace pension scheme after being enrolled into it, and a further 8% said that they initially opted out but went back in.
The majority are looking to increase their contributions, too: 75% of respondents said that they'll increase their payments automatically should they get a pay rise, while 40% plan to increase their contributions next year, rising to 50% for those who said that their pension was a high priority. Most aren't put off by the planned increase in contributions, either, which will see total minimum contributions (including those from the employer) rise to 8% next year.
"It's encouraging to see that auto-enrolment is welcomed by millennials and that the potential concern that many would opt-out when the increases come into effect next year appears to be misfounded," said Jamie Clark, pensions business development manager at Royal London.
"Increasing saving into a pension can seem daunting and difficult when there are other financial priorities and pressures, [so] it's great to see that automatic gradual increase in contributions, perhaps in line with pay rises, is potentially viewed by millennials as a way to help lessen the financial impact."
Despite the positive mentality of many younger savers, over half (57%) said they knew that they should be saving more into a pension. Indeed, it's generally accepted that we should be saving around 12% of our income into a pension, so even the planned rise in minimum contributions next year may not be enough to guarantee a comfortable retirement.
"Nearly a third (28%) of millennials with a pension didn't know what pension contributions were being made," added Jamie Clark."Potentially more concerning is that they believe that the contributions being made are adequate to secure a good income in their retirement, when that is just not the case."Although they are saving, there is the risk some may still sleepwalk into poverty in their retirement by not regularly reviewing their savings and not taking advantage of opportunities to increase their pension savings when possible."
So what can you do to stand the best possible chance of having enough to see you through retirement? Well, the key is to get saving! Save as much into your workplace pension as possible from as early as you can, and if you can, try to save more than the minimum. Increase your contributions in line with a pay rise and you won't even notice the extra money going into it, but it could make a big difference when it's time to retire.
You may want to consider alternative methods of saving, too, such as by putting money aside into an ISA or the new Lifetime ISA that's specifically designed for this form of long-term saving. If you're getting serious about your financial future, it'll be worth speaking to a financial adviser, who can help you get on the right track for a comfortable retirement.
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