If you are retirement planning in Cheshire, new research has revealed a lack of preparation among young people for later life.
With the state pension age set to rise from 2026, more than 50% of those aged 18 to 28 have yet to save anything towards their retirement. The survey of 1,000 adults was published in ‘The Gen Z Pension Report’ by money app Plum.
Rotimi Merriman-Johnson is a personal finance expert who has studied this area. He believes that people in their 20s, starting out in their careers, need to be thinking ahead. By setting aside £275 a month from the age of 22, on an average yearly return of 5%, this equates to a retirement pot worth £560,000 by the age of 67.
While £275 may sound like a daunting sum, remember that employers are obliged by the Pensions Act 2008 to enter all eligible staff into a workplace pension. Auto-enrolment rules mean that an amount equivalent to 8% of a gross salary is paid into a pension each month, but only half of that is deducted from an employee’s wage. Of the remainder, 3% is contributed by the employer and 1% in the form of government tax relief.
Young people crave more information, perhaps via bespoke apps, in terms of how much they need to save for retirement. The research found that 85% of those surveyed understood the impact small contributions could have on their pension pot, even if most felt retirement was too far in the distance to think about.
