Younger people lagging behind with pension provision

Opinion

Younger people lagging behind with pension provision

According to Government research, young workers are nearly four times less likely than their older counterparts to be saving in their employer's pension scheme. These figures show a stark generational gap in pension provision, with only 15 per cent of young employees aged 16-24 participating in a workplace pension scheme whilst of the 45-54 age group, 58 per cent pay into a workplace pension scheme.

The analysis is further evidence that young people are not saving enough to support themselves in retirement. This especially pertinent as we spend an average 23 years in retirement.

However, the numbers may change as the introduction of automatic enrolment starts in October 2012 and takes effect over the next few years. Everyone aged at least 22 and under pensionable age earning more than £7,475 will be eligible for automatic enrolment with an opt-out for those that want to stay outside the system. Where employees earn more than £5,035 then their employer will also have to contribute to their pension.

This was first published in September 2011

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