The idea of saving for retirement when you’re a young and fabulous twenty-something feels a little boring, and kind of pointless, right? Old age is too far off to worry about, after all.
Except, as terrifying as it sounds, retirement is coming for us. And, although we’ve only just started earning some actual money, a new study has given a warning nod to millennials everywhere about what they should be putting away.
Research from investment and pensions specialists Scottish Widows has confirmed that we will need around £23,000 a year to live on once we’ve retired. To achieve this, we need to start saving approximately 12% of our annual salary (including contributions from employers) from the age of 22.
Unfortunately, though, hardly anyone is actually doing this: in fact, seven out of 10 young people are failing to contribute the recommended amount to their pension.
70% of people taking part in the survey admitted to not saving enough for their old age, partly because of student loans taking a wedge of their wage. Others reported that they were struggling with unpaid credit card bills.
So why is it that our grandparents reign supreme when it comes to scrimping? Well, according to the report, technology is to blame (which sounds like a good enough scapegoat to us).
Apparently, the digital nature of our lives has turned us off from saving. As a result, says Scottish Widows, “the industry must make significant investment in digital innovation.”
“We need to reflect the way young people engage and do it quickly or we risk turning off a whole generation to long-term savings,” they said.
Speaking to the Daily Mirror, Catherine Stewart, a retirement expert at Scottish Widows, explains: “While retirement may feel like a long time away for those in their twenties, it's really important they start to think about it as soon as possible.”
“Using the right platforms, technology and content to engage young people in formats they appreciate is a critical first step.
“If we don't get this right then it is far more difficult for them to reach their desired savings levels in their 30s and 40s.”
So, if you’re guilty of burying your head in the proverbial sand, it could be time to actually read those pension letters your work has been sending you and take another look into how much you are contributing to your plan.