The current financial climate has brought plenty of uncertainty with it for workers young and old.
As incomes are being squeezed by high inflation rates and reluctance on the part of some bosses to raise wages in line with inflation, saving for retirement and the future might not seem like an option for many workers; especially those who are still saddled with student debts.
However, as a survey conducted by the National Association for Pension Funds revealed, younger workers who might be a long way from paying off debts accumulated while at university are more willing than their older peers. Surprisingly, a healthy 53% of 25 to 34-year-old workers said they planned to put some money in their pension fund over the course of 2013.
Youth trumps experience saving for retirement
While more than half of young workers said they planned on saving for retirement and the future, the same can’t be said of older workers. A disappointing 26% of workers between the ages of 35 and 44 said that they were willing to save for their pension at some point this year. The average figure for all workers stood at 38%, which equates to a disappointing less than four out of 10 people in employment.
Among the possible reasons why younger workers seem more willing to save for retirement may are:
- Likely changes to the way in which the state pension works
- The mass rollout of auto-enrollment in workplace pension schemes
- Uncertainty over whether pensions will offer good value for money in the distant future
- Being more financially astute as the result of this climate of austerity
Whatever the reason may be, some experts believe that saving for retirement early on is a good decision for a young worker to make. According to a spokesperson from mypensionexpert.com:
“Starting saving for retirement at the youngest age possible is always advisable and beneficial. Saving over as many years as possible will no doubt help boost the funds available at retirement and will take the burden away from the later years of working life.
“These figures are therefore encouraging and could be down to the increased media activity surrounding one of the biggest financial services shake up, Auto Enrollment. The new switched on generation cannot fail to notice the coverage of these changes.
“The increased awareness could also be coming from their parents who are facing record low annuity rates and low retirement income and are therefore warning their children in advance”, they added.