UK's under 35s failing to save for retirement

24 April 2003
More than a third (38 per cent) of Britain's 18-34 year olds have not started saving for retirement yet.

According to the Savings in Britain report from Lloyds TSB, nearly on in five young people have no plans at present to start planning pension provision, despite almost half (45 per cent) agreeing that people should start saving in their 20s.

Despite the large proportion of younger workers not yet providing for retirement, only 13 per cent of those under 35 believe that a state pension will sufficiently provide for them in old age and 60 per cent expressed concern about not having enough money when they retire.

Of those who stated that they do save regularly, 24 per cent put money away 'for a rainy day', 20 per cent for holidays and 10 per cent for home or garden improvements. Less than three per cent said they were putting money aside for the future.

'Lack of spare cash' (60 per cent) was cited as the main reason stopping this age group from saving. Other deterrents included a desire to spend what they have now (nine per cent) and already using their savings for a particular purpose (six per cent).

Diann Hartnell, head of savings at Lloyds TSB, commented, 'These alarming statistics suggest that, whilst the penny has finally dropped that saving for retirement is important, many of the nation's twenty and thirty-somethings are adopting an 'ostrich mentality' when it comes to pension provision.'

'Lack of financial know-how coupled with a desire to enjoy their hard-earned cash now means that young people could risk an impoverished old age in the future,' she added.

Of those surveyed more men said they were saving for retirement than women, 32 per cent against just 23 per cent of women.