Over one in five (21%) of younger people in Britain have said they have greater consideration for how much money they need to live on due to high inflation, Standard Life has found.

The firm’s retirement voice report revealed that more people, particularly young adults, are now beginning to think about their financial future and are turning their attention to their retirement finances.

Furthermore, 15% of young people have said they were considering their finances as a result of rising interest rates.

The report revealed that those who begin on a salary of £25,000 per annum and pay the standard monthly auto-enrolment contributions (3% employee, 5% employer) from the age of 22, could have a total retirement fund of £434,000 at 66 years old, not adjusted for inflation.

However, waiting five years to start contributing could result in a £114,000 decline in the size of the retirement pot.

Managing director for retail direct at Standard Life, Dean Butler, said: "The economic backdrop of the last couple of years has affected most people’s finances with the cost of essentials like food and household bills and higher mortgage, rent or debt repayment costs due to rising interest rates still outpacing income rises for many. This has acted as a stark warning for some Brits who’ve been forced to focus on their finances, both short and long-term.

"Younger generations starting to engage more with their financial futures is perhaps one positive to take from a tough situation, as this could help improve their long-term financial outcomes significantly. Though it can feel daunting to think about the far future, the sooner people start planning for retirement and contributing towards their pension the greater their retirement outcomes can be."

---