Fairstone survey highlights urgent need for ‘millennials’ to plan for retirement

74% of those aged 16-24 have no retirement plan in place

A wide-ranging independent Ipsos MORI survey published today by Fairstone, one of the UK’s largest chartered financial planning company, provides insight into how younger people approach their personal finances.

Just 1% of younger people aged between 16-24, who are working, believe they will be able to retire before the age of 50 whilst 8% do not intend to retire at all – the largest cohort to forecast this of any other age category apart from the 55-75 age group, which has a much clearer view of their retirement plans. 19% of respondents of working 16-24 year olds believed that they would retire between 66 and 70 years old, perhaps reflecting the likelihood of a later retirement age set by the government in the years to come. The largest proportion was the 22% of 16-24 year olds who are working who did not intend to retire until they could collect their state pension.

Asked whether they would be taking out a new Lifetime ISA in the next 12 months, 41% of 18-24 year olds were likely to do so and 42% were unlikely to do so. Those aged 18-40 with a higher education qualification or those who already have a higher education qualification were significantly more likely than the national average to be considering a LISA positively with 51% likely to take out a wrapper.

Looking to the make-up of savings for those in the 16-24 age group, 62% have some form of cash savings. 5% have an investment in shares, whilst those with personal or workplace pensions savings stands at 12%.  A further question relating to the specific type of pension used by the working 16-24 year olds, 80% made use of a workplace pension whilst only 16% had set up any form of personal pension plan.

74% of the 16-24 age group do not have any retirement plan in place and just 35% have reviewed the cost or performance of the savings and investments they do have during the previous 12 months.

Commenting on the findings, Peter Savage, Chartered Financial Planner at Fairstone, said:

“It is estimated that there is an average of £400 billion to be passed from grandparents to the younger generation over the next 10 years, which suggests there has never been a greater need for financial advice. It is perhaps more difficult now to save given the difference in house price inflation over the last 30 years compared to the rate at which wages have increased over the same period but an early start for pension planning is always better. 

“I am not surprised that such a large proportion of this age group have no pension plan in place, after all, retirement must seem a long way off but I can never stress enough that beginning the planning process when you are young can make a huge difference to retirement outcomes. Of course, retirement plans can be altered to meet the needs of the individual as the years go by but I truly believe that your money is too hard earned to be ignored.”

To find out more about the options available to you, contact Fairstone on 0845 605 0689 or email info@fairstone.co.uk for further information.

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