Britain’s young adults save more of their monthly disposable income than any other age group but few are currently saving for retirement, according to a YouGov survey commissioned by BlackRock.
Just over one in ten (12%) Brits aged 25-34 are currently putting aside money for retirement, despite saving nearly one fifth (18%) of their monthly disposable income, which is higher than any other age group.
Our poll reveals that 25-34 year olds have more pressing financial priorities than putting money aside for old age.
- Almost half (48%) of Brits aged 25-34 are saving money for rainy day emergencies and near-term needs
- Almost a third (32%) of this age group are putting money aside to buy a property
- Over a quarter (27%) are saving up to go on a holiday
- One in ten (10%) say they are putting money aside to buy a new car
However, Brits in this age group do recognise the need for retirement planning, with over half (56%) planning or saving for older age, and a strong majority (82%) interested in increasing their financial knowledge. This is reflected in the views of the British public, as 94% say that retirement is their personal responsibility.
Expectations for retirement
Almost a third (31%) of Brits aged between 25 and 34 say they expect to retire on an annual income of more than £30,000 a year, which is higher than the national average salary of £26,100. For a retirement income of £30,000 a year, people aged 25 today and retiring at 65 would need to put aside £4,950 a year to accumulate a pot of £599,967, assuming an annualized return of 5%. If they wait until 35 to start investing, they will have to save £9,000 - or twice as much - each year to reach the same goal at the same rate of return.
Tony Stenning, head of UK Retail at BlackRock, said: “The stark reality is that putting something aside for old age has become a necessity. But our established savings culture should enable people to plan ahead. By starting early and saving regularly Brits will help themselves build a bigger retirement pot more in line with their expectations for a reasonable income and lifestyle in later life.”
BlackRock provides investment management, risk management and advisory services for institutional and retail clients worldwide.