Pension News Young People Don’t Expect Government Retirement Support
14 May 2003
Just three per cent of young people are relying on the government to supply them with a pension, according to new research.
A report by the Co-operative Insurance Society (CIS) showed that most 18-25 year olds are no longer relying on government support for their future.
The study looked at the attitudes of 18-25 year olds to pensions. Only three per cent of respondents said that the word pension made them think of ‘something paid for by the government’.
Of those interviewed, a third (33 per cent) said the word made them think of ‘old age’, associating it with something that you would pay into in later life.
However, with a number of social and economic factors affecting the funding and price of pensions, it is clear that more needs to be done to educate young people on the merits of early pension planning.
Young people may realise that the State is unlikely to provide an adequate income in later life, but most do not realise the benefits of starting their own pensions sooner rather than later.
For example, someone who begins saving aged 20 is likely to receive a pension at 60, which is almost three times that of someone who starts saving at age 40.
CIS is urging young people to consider making their own provision for retirement.
With an increased life expectancy, people are looking forward to longer retirements than ever before. Life expectancy in the UK is continuing to rise, and currently stands at 15 years for men over 65 and 20 years for women of the same age.
Finian O’ Boyle, CIS Chief Operating Officer commented, ‘By recognising that they should not rely entirely on the state for retirement income, young people have made an important first step on the path to self-provision. This now needs to be carried forwards and young people need to take more control of their financial planning needs at an earlier age.
‘Saving for the future via a pension still remains a highly tax-efficient way for people to save in the UK, but people still find the word pension off-putting and confusing.
‘CIS is working in a number of practical ways to make pensions more accessible and easier to understand and we would urge young people to take the opportunity to find out more.’