Young adults not saving enough for later life – Scottish Widows

Forty-nine per cent of savers between the ages of 22 and 29 years are still not doing enough to prepare for later life, according to research from Scottish Widows.

In less than a decade, Scottish Widows suggested auto-enrolment has “turbo-charged” retirement planning, with 10 million people now saving into a workplace pension.

The level of adequate savers – those putting away the recommended minimum 12% – has reached a record high of 60% largely because of auto-enrolment, Scottish Widows added.

The research, conducted across a total of 5,757 adults, suggested that more than half of 22 to 29-year-olds are now saving adequately for retirement – a significant increase of 11% on last year’s figures – up from 40% to 51%. This is also a large increase on the 30% who were saving adequately in 2017, when Scottish Widows first began tracking the UK's young savers.

Despite assurances from the Government that they would lower the auto-enrolment threshold, Scottish Widows also suggested that savers aged between 18 and 22 are still missing out on vital employer contributions towards their retirement.

Scottish Widows head of policy, Pete Glancy, commented: “Auto-enrolment has transformed the retirement prospects of millions, giving everyone a better chance to retire in safety and security.

“Young people in particular have benefited by saving through auto-enrolment, alongside record levels of employment and inflation-busting wage growth before lockdown. However, we shouldn’t be celebrating prematurely as we are still seeing the nation’s youngest savers excluded from these benefits (18-22-year-olds).

“We also recognise that the next 12 to 18 months is going to be about businesses and individuals getting back on their feet. With the impact of auto-enrolment having plateaued, now is the time for policymakers to focus on cohorts of the population, like young savers and those hardest hit by COVID-19, who are not yet benefiting from the current system and need effective solutions to help them save for the future.”

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