Pension Pillar - Generation X and saving for retirement

Looking at customer research we recently conducted, I was reminded of how challenging it remains to get people saving for their retirement and help them make informed decisions. For example, 43 per cent of over 40s surveyed don’t think they have saved enough for their retirement. At 51 per cent of over 40s surveyed, the number of those who wished they had saved more for retirement when they were younger is even higher. Just 25 per cent of those over 40 surveyed felt that they had saved enough.

 By Martin Palmer, Head of Proposition, Corporate Benefits - Friends Life

 This perfectly illustrates one of our long-standing challenges – when you are young, and saving for retirement will bear the most fruit, most of us really aren’t interested. It seems so much more important to pay off your student debt, save for a deposit for a house or go on that holiday in the sun. It takes a while for us to grow out of the ‘live now, save later’ attitude: unfortunately, by the time we do, it is that much more difficult to save enough for a comfortable retirement.

 But what is more encouraging is that our research also suggests that this may be changing as those between the ages of 18-24 are realising the importance of saving to provide for the financial future they are looking for. With auto-enrolment ensuring that this good intention is translated into action, there is some hope that this age group will not find itself in the same situation as the over 40s.

 But alongside this positive finding with regards to Generation Y, the research also uncovered that over a third of 31-39 year olds are being worryingly complacent, and not saving anything for retirement at all.

 Where this research will really help us, is in tailoring our messages to the different segments of our target audience. For example, we could use case studies of the over 40s to influence their almost-peers, the over 30s, to start saving and to help the over 40s to find ways of saving more.

 Communication is indeed where we can make the biggest difference to the retirement provision of all generations. We need to ensure we get the right message across using the right media channels. The list of ways to communicate is almost endless and it seems to grow daily: pension apps; contribution messages at ATMs; setting up or joining a group on LinkedIn or making friends on Facebook. But reaching the ‘iPod’ generation is about much more than websites and apps, it is about successfully targeting our message to reach our target audiences in the way they want to be reached. We also need to provide the right tools and education to ensure that all generations understand how our saving products are working which will help to engage savers and enable them to take control of their retirement. Above all we need to keep things simple so that we don’t bombard people with information that they won’t read, or worse, puts them off altogether.

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