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Industry Insights
March 26, 2024

Majority of younger savers maintain pension contributions despite cost of living

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Almost three quarters (74 per cent) of 18- to 34-year-olds have maintained their pension contributions despite the rising cost of living, according to a survey by Brown Shipley.

The survey found that more younger savers have maintained their pension contributions compared to older generations, with 67 per cent of those aged 35-54 and 40 per cent of those aged 55-plus maintaining pension payments.

Furthermore, the survey found that the younger generation are on track to retire earlier than other age groups.

The UK average age of planned retirement for wealthy individuals is 63, specifically for 35- to 54-year-olds it’s 61 and for people aged 55-plus it’s 66, but this decreases with 18- to 34-year-olds aiming to retire at 58.

On average, just over half (55 per cent) of wealthy UK adults, according to the survey, have maintained contributions despite challenging financial times.

The research also found that men were more likely to have increased pension contributions than women, with 20 per cent of men having done so compared to 16 per cent of women.

Despite the fact that the younger generation’s retirement savings are less likely to be impacted by financial constraints, over two-fifths (43 per cent) of affluent younger adults do not plan to pass on wealth, due to needing the money to support themselves later in life.

In contrast, almost two out of five (37 per cent) of those between 35-54 and, one out of five (20 per cent) of over-55s plan to pass on wealth.

Commenting on the findings, Brown Shipley’s wealth planner, Kenny Cummings, said: “There is a clear generational shift in financial-planning attitudes.

“Younger generations are prioritising early retirement and taking proactive steps to secure their longer-term wealth goals.

“Long-term wealth planning continues to be important for all generations, however, as everyone must continually align their personal financial goals with the variety of challenges that may come one’s way."

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