New research from M&G, a leading savings and investment firm, reveals that over a third (35%) of Brits, some 19 million people, started planning for their retirement before turning 30.
The findings challenge the stereotype that younger generations are disengaged from long-term financial planning. In fact, the average age for pension awareness is 31, with many actively managing their retirement savings through consolidating pots, seeking advice or changing contributions, by age 35.
The financial impact of starting to save when young is substantial. Someone who begins saving at age 23, the average age for entering full time work, could build a pension pot worth £596,000 by retirement age, assuming they are contributing 8% on average of their salary through auto enrolment. Wait until age 31, and this pot could be worth £450,000 at age 68. That’s a difference of £145,000 achieved with less than £20,000 in additional contributions thanks to compound growth and the impact of employer contributions.
Anusha Mittal, Managing Director of Individual Life & Pensions at M&G, said: “Retirement shouldn’t feel like a distant or daunting concept, it’s simply the next chapter of your life, and one that can be shaped by the small decisions you make today. It’s positive to see that so many people take this approach by saving towards their future in their 20s and 30s. Starting to save when you begin working is one of the most powerful financial choices you can make. Even modest contributions in your 20s can grow into something substantial over time, especially when matched by your employer.”
While the data highlights encouraging saving behaviour, it also found some worrying trends. One in five adults (20%), nearly 11 million people, don’t begin planning until age 40 or later and one in six (16%) have no pension at all, rising to one in five (19%) women. The study points to a complex mix of barriers preventing some starting saving at a younger age. One in three (30%) without a pension say they simply can’t afford to save, while a fifth (19%) say it’s because they don’t have a stable job or income.
Among those who do have a pension, nearly half (44%) don’t know its value. Men with pensions are significantly more likely to know how much they’ve saved (59%) than women (43%), pointing to a gender gap in pension engagement that could compound over time.
To help address this, M&G, in partnership with the Social Market Foundation, Britain’s leading non-partisan think tank, is advocating for a ‘pension checkup’, a simple accessible way for people to review their retirement savings and take timely action on a regular basis. The idea has strong public support, especially among younger adults with 42% of 18-24 year olds5 saying a one stop view of their pension would help them engage.
The initiative forms part of M&G’s Reframing Retirement6 campaign, which is challenging outdated perceptions of retirement to encourage people to financially plan for their future.
Anusha Mittal continued: “The good news is that it’s never about getting everything perfect from the start. It’s about building momentum. A regular pension check-up, just like a health check, can help you stay on track and make informed decisions. The earlier you engage, the more freedom and confidence you’ll have later on.”
For more information on M&G’s Reframing Retirement campaign, visit here
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