The Changing Face of Retirement: The Young, Pragmatic and Penniless Generation sets forth some of the key challenges facing people in their twenties as they seek to balance their immediate financial pressures with the goal of planning for retirement.
Young adults are, whether they realize it or not, forging a brave new world, one which is highly educated, high tech, and well traveled.
Young people are financially stretched
Yet in this world of new opportunities, many young people are financially stretched. The ongoing global economic downturn has created a highly uncertain financial outlook with historically high levels of youth unemployment and personal debt (particularly student debt).
There are competing pressures on young adults to establish themselves in the world of work while starting a family and planning for the long-term.
At the same time, governments and employers are busy introducing pension reforms that place greater financial responsibilities on younger people to fund their own retirement.
Strong aspirations to save
Faced with this challenge, our research finds that the aspiration to save for retirement remains surprisingly strong for employees in their twenties.
One quarter are saving already, and almost half would like to begin. As the squeeze on household incomes places constraints on their ability to save, it is necessary to improve access to retirement products, preferably with clear tax benefits, and to better financial education and advice.
Better retirement solution for young adults
It is our hope that the insights gained from this survey will contribute toward retirement solutions which better fit the ever-changing lives of young adults.