Three-quarters (75%) of 30-49 year olds and 81% of 18-29 year olds do not understand pensions, according to research by Barnett Waddingham.
Its Helping Hands research, which surveyed 850 members of the public, also found that 40% of respondents aged between 18 and 29 claimed not to have heard of pensions auto-enrolment, while a third (33%) said they have no pension savings at all.
Just 4% of this group rated building a pension as being most financially important to them, with saving for a house (49%), clearing debt (41%) and buying a car (6%) taking precedence.
The research also found:
- 70% of respondents aged 30-49 said paying off their mortgage was their primary or secondary financial pressure which kept them up at night
- Only 4% of those aged 30-49 would be very likely to pay for advice
- 80% of respondents aged 50 or above are aware of the new pension freedoms introduced in the 2014 Budget
- Two-thirds of respondents aged 50 plus properly understand their retirement options
- 75% of this age group do not view their pension investment as safe.
Damian Stancombe (pictured), head of workplace health and wealth at Barnett Waddingham said: “A 25 year-old is going to have a fundamentally different view of what’s important to a 40 year-old, and again to a 55 year-old.
“Employers and trustees need to significantly change the way they communicate with each generation regarding saving for retirement. To truly engage, they can no longer communicate collectively across generations when there are particular concerns that will be missed without communicating to individual age groups.”
“It is telling that 18-29 year-olds rated saving for a house and clearing debt significantly above building a pension.
“A number of survey respondents commented that they didn’t see the point in building a pension when they have existing debt to contend with.
“Ultimately true saving begins with debt management. To tackle the issue of engaging this age group with pension saving, new strategies to help the young clear debt need to be considered by both the government and employers.”