Pensions involve a minefield of complicated choices for UK consumers, and none more so than for millennials. Unlike the generations before them who enjoyed generous final salary pension schemes, millennials have no choice but to divert more of their salaries into pension schemes to ensure they accumulate enough to enjoy the same standard of living in retirement.
Today is Pensions Awareness Day and we should help millennials learn about the need to save more; save earlier in their lives; and take on enough risk to enable them to meet their retirement goals. Since 2002, market movements have benefited younger pension savers, boosting the average pot by 168%. This is because 25-34 year olds typically take on more risk and can afford to be less concerned with short-term volatility because investments are focused on long-term growth. It is crucial that those starting their savings journey understand what the right level of risk is for them early on, so that markets can do much of the heavy lifting over the next 40 years and deliver them the pension they need for the lifestyle they want to have in retirement.
A lunchtime lesson about pensions for millennials A pension is a bit like a supermarket ‘meal deal’ that you might buy for your lunch