Nearly nine in ten (86%) of Generation Y are now thinking about their retirement plans before they are 30, according to recent research by the National Skills Academy for Financial Services (NSAFS) in partnership with AXA Investment Managers (AXA IM).
Generation Y, those currently aged 18-34, are considering their plans at an increasingly younger age than their baby boomer parents, starting their plans at age 27 on average. By contrast, over-55s did not start thinking about life after work until they were 41 on average, a difference of 14 years.
The figures emerge amid a shifting retirement landscape with the introduction of radical pension freedom reforms, auto-enrolment and the disappearance of defined benefit pension schemes, which have brought challenges to individuals of all ages.
The research revealed that there are significant gaps in basic education on preparing for “life in retirement”, as 47% of people wish they were educated on retirement options at an earlier age. Nearly 60% of 18-34 year-olds say they need more financial education to help get them ready for retirement.
Individuals have become overwhelmingly self-reliant for their retirement financial education and three in five people say that they have taught themselves about finance. However, among 18-34 year-olds, only 13% felt it was their responsibility and a third (33%) of younger people thought the government should provide financial education.
Stephanie Condra, Retirement Market Strategist at AXA IM, said: “The research shows that individuals are clearly thinking about retirement, but don’t feel equipped with the knowledge to make essential decisions. It reinforces the need for both the industry and government to develop solutions that will educate people about what they can do today to improve their chances of having the lifestyle they want in the future.
Sylvia Perrins, CEO at the NSAFS added: “Ongoing regulatory changes and the shift away from defined benefit pension schemes means that it is more important than ever for employees to take an active role in planning for their long-term financial future.