By Maximilian Clarke
The UK’s ‘Foundation generation’ are actively planning their finances with a view to long-term saving, a study by Aviva plc (LSE: AV) has found.
The generation of 25-35 years olds were found to be ‘savvy and serious about managing their money’, with 50% owning a pension.
The findings from the research paint a picture of a financially aware generation that is taking stock of their financial situation in today’s challenging economic environment. This foundation generation of 25-35 year olds, so called because they are laying the groundwork for their financial future, are also developing their careers, managing their debt and budgeting their day to day spend.
While some of the [b]foundation generation[b/]’s current financial goals focused on short—term issues such as saving for a holiday or to fund their hobbies/interests, far more people are looking to the future. Over a third are saving to buy a house, 34% are aiming to pay off their debts and 20% are looking to pay off their existing mortgage as quickly as possible. In addition, 22% are saving for the future generally.
The biggest single current worry for this group was meeting an unexpected expense (23%) and making ends meet each month (19%). This far outstripped those people who are worried about keeping up with their friends financially (1%). Not surprisingly, with high unemployment 13% named losing their job and prolonged unemployment as a key long-term financial concern.
“With so much concern about people not saving enough for their retirement, it’s really good that this younger group of men and women seem to be actively managing their finances and planning for their future," said Aviva’s director of workplace savings Paul Goodwin. "This generation has the ability to make a real difference to their standard of living right up to and through retirement, if they put money aside now for the long-term.
“While there is a natural tendency to think that the younger generation will put off saving for retirement to fund their lifestyle now, this research shows that they do actively want to balance their spending with long-term saving. What we need to see is that this desire to save translates into more people actively putting money aside for the future as soon as they start their working lives.
“With automatic enrolment starting next year, every employee will have the opportunity to actively save for the long-term through a workplace scheme. Continuing to explain the range of benefits available in the workplace will ensure that employees don’t opt out, and make the choice to put money aside for the future.”
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