Young workers keen to prepare for retirement but pessimistic about finances

Young workers in the UK are pessimistic about how much money they will have in retirement but are keen to do what they can to prepare, according to investment advisers State Street.

A survey by the firm found that fewer than one in 10 young workers felt financially prepared for retirement, and a similar proportion thought they would be able to retire when they wanted to, BBC News reports.

“People are interested in securing their financial future and are willing to make changes to their spending habits to make this happen,” said Nigel Aston of State Street in the report.

“They are also realistic about their income expectations in retirement. We must use this positivity to make it as easy as possible for individuals to understand their options.”

State Street suggested that the pensions industry needs to do more to help people understand whether they are on track to meet their income expectations in retirement.

Separate research by the Office for National Statistics (ONS) shows that employees see workplace pensions as the safest way to save for retirement.

Paying into an employer pension was the most popular option, chosen by 40% of all employees surveyed, followed by investing in property (29%) and paying into a personal pension scheme (13%). Investing in property was slightly more popular among those aged 25 to 44 years, while those aged 16 to 24 years were the most likely to think that paying into a personal pension was the safest way to save for retirement.

Overall, almost 63% of eligible employees were aware that they had been automatically enrolled into a workplace pension.

However, there was a decrease in the proportion of those who feel they understand enough about pensions to make a decision about saving for retirement, down from 46% to 42%.