Young workers are nearly four times less likely than their older counterparts to be saving in their employer’s pension scheme, according to figures from the Department for Work and Pensions.
Only 15 per cent of young employees aged 16 to 24 are participating in a workplace pension scheme, compared to 58 per cent in the 45 to 54 age group. But only 50 per cent in the 55 to 64 bracket have joined their employer’s pension.
The DWP says the analysis is further evidence that young people are not saving enough to support themselves in retirement. It estimates that approximately 7 million people are currently not saving enough to deliver the pension income they are likely to want or expect in retirement.
Pensions minister Steve Webb says: “Young people face a very different retirement from their parents and grandparents. Only one in three people working in the private sector is contributing to a workplace pension, annuity rates are falling and we are spending on average 23 years in retirement – we are saving less and could face a poorer future in retirement as a result.
“We need to inspire a culture of saving, where young people recognise the benefits of saving and start as early as possible. That is why the introduction of automatic enrolment will be so significant, getting millions of people saving with a contribution from their employer, many for the first time”.