Partner Article

Generation Y Must Avoid Having a Rough Retirement

GENERATION Y NEEDS MORE HELP IF IT’S TO AVOID HAVING A ROUGH RETIREMENT

retiresavvy.co.uk shares views of nation following heated forum and social media debate

Baroness Altmann OBE, questions auto-enrolment and calls for more flexible saving plans for aspiring homeowners. Parenting bloggers reveal they save the bare minimum, prioritise ‘life’ rather than their future, and bank on winning the lottery. Pension experts agree with Altmann and want to see integration between debt and saving. retiresavvy calls for Yorkshire’s input into debate.

Retiresavvy.co.uk, the online retirement community powered by Skipton Building Society, this week shares the results of a heated debate on its forum, looking at how today’s younger workers are preparing for retirement.

Retiresavvy, which aims to champion today’s retiree generation, is keen to showcase cross-generational views on retirement planning - and the results reveal that today’s younger workers feel they need more help if they are to avoid a rough retirement.

Leading dad blogger, author and media commentator, John Adams of Dad Blog UK posted the following thread on the new forum: “Do young people give enough thought to retirement?”

Over 2,000 views later and having generated much social debate, with input from now-Pensions Minister Baroness Altmann OBE, as well as a mum and dad bloggers, pensions experts and the general public, the forum thread and social media interaction has revealed:

There’s not enough accessible, engaging information on retirement planning and pensions to interest younger workers, and not enough is being done in workplaces to educate employees; Many are living in denial and have an ‘out of sight out of mind’ attitude to retirement – they’ll worry about it when they get there and hope to win the lottery; There’s a huge gap in Generation Y pension provisions based on current savings levels – but many people in their 20s/30s say it is unrealistic to commit to saving for a pension as mortgage and paying off student debt are greater priorities

Some users think that young people live for the moment and don’t have enough of an eye on the future, with suggestions that this is irresponsible.

Baroness Altmann called for more flexible saving plans to allow aspiring homeowners to combine saving for a pension with other financial priorities, and suggested the ‘gamification’ of pension information through apps to make it more engaging.

She wrote: “For 20-somethings who have large student debts and do not yet own a home, is it really sensible that auto-enrolment forces them to pay into a pension themselves in order to get an employer contribution?

“I wonder if those who save for other purposes could also receive the extra money into a pension, while being free to spend their savings on other things that they need first. So if you are saving 4% of your salary to buy a house or you repay a student loan, then you still get another 4% of salary going into a pension, which you can then top up later if you want to.

“As soon as you are enrolled into a pension, you should also be eligible for on-line tutorials and teach-ins on how pensions work. Perhaps gamification would help - some clever apps to make pensions fun would be a great idea.”

John Adams said: “I wrote the post to explore whether or not young people are living in a bubble of unpreparedness - myself included. Younger people today suffer from more financial pressures than previous generations, and more should be done to support retirement planning. But equally, if people were serious about wanting to prepare for retirement, then some of today’s ‘everyday luxuries’ could be foregone and saved.”

Retiresavvy content editor, Andrew Sheen, said: “With the ever rising state pension age, getting younger workers to take charge of their retirement plans is important. Auto-enrolment is a good start, but contribution rates – how much you pay in – need to be higher. As Baroness Altmann says, we need more information, better education and maybe even a whole new approach to pensions.

“The forum thread has sparked debate and generated a wide range of views and insights, and we’re in the middle of some really exciting discussions with other industry partners about trying to address some of the issues raised. There’s a definite need for more innovation and new approaches to planning and saving for retirement, and it’s only by getting the insights and opinions of real people that we can look at what might work. We thank everyone who has contributed so far, but invite more views and are calling out for Yorkshire residents to have their say.”

Retiresavvy.co.uk has been established by Skipton Building Society as a non-commercial venture to drive awareness of the issues facing retirees and those planning for retirement. In its launch manifesto, it committed to being a strong and positive force for change and to work to help create a paradigm shift around the perception of retirees and retirement. Retiresavvy also aims to provide and campaign for wider access to information and education around retirement planning, especially for those in the prime of their careers.

This was posted in Bdaily's Members' News section by Matthew Wignall .