Pensions - Articles - Generation Y expect £100K pension pot but 53% are not saving


New research* from workplace pensions provider NOW: Pensions reveals that Generation Y think they’ll have around £95,000 in their pension pot when they retire with men expecting £111,000 and women expecting £82,000. This comes despite over half (58%) admitting that they haven’t started saving yet.

 Of those surveyed, 65% of 18-25 year olds say they aren’t saving into a workplace pension with 53% of 26-35 year olds stating that they are yet to begin saving.
  
 When presented with information about how much would potentially come out of their pay packet each month, only a third (31%) say they could afford to save while 44% say they can’t afford the contribution now but believe they will be able to in future.
  
 The average salary young people say they would need to earn in order to be able to afford to make a pension contribution is £26,836.
  
 Of those that are saving, the average amount being set aside each month is £22. If contributions continued at this level, this would deliver a pension pot of £18,000 over 30 years of saving and £56,500 over 40 years of saving assuming 5% per year investment growth.
  
 To achieve a pension pot of around £100,000, savers would need to set aside approximately £120 each month if they saved over 30 years and £70 if they saved over 40 years assuming 5% per year investment growth.
 If used to buy an annuity at retirement, a £100,000 pension pot would buy a fixed income of between £5,000 and £6,000 a year.
  
 Morten Nilsson, CEO of NOW: Pensions said:
 “Auto enrolment will go a long way to getting young people into the savings habit but the sooner they start saving and the more they set aside each month, the easier it will be.
 “While a £100,000 pension pot seems like a healthy amount, men aged 25 today are likely to live until they are 88 and women are likely to live until they are 91** which means that this pot has to fund around two decades of retirement
   

Back to Index


Similar News to this Story

Transfer Value Index sees first increase since start of 2025
XPS Group’s Transfer Value Index increased to a month-end value of £141,000, marking the first month-end increase in the Index since the start of 2025
State Pension Age may rise to the dizzying height of 80
In response to the Government's review of the state pension age, and the OBR's "Fiscal risks and sustainability" report, Jack Carmichael, As
So Sally Can Wait but your pension cannot
While Liam and Noel might not feel the pinch of their sixteen-year hiatus, the average worker could end up £77,000 worse off in retirement after a sim

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.