Recent analysis from Prudential has shown that dreams of owning a home are overtaking the desire to put money aside for retirement.
- 35% of millennials say they prioritise saving for a deposit on a home instead of their retirement.
- 19% say buying a house is the main reason they don’t save more into their pension
- 10% say student debt stops them saving into a pension.
- 9% admit that frequently changing jobs affects their ability to make regular pension contributions.
- They are willing to make sacrifices for home ownership with 10% living with parents instead of renting to help save more money for a home.
- Men are almost twice as likely to be heading home compared to women.
- 31% expect to buy their first property by the age of 30, with men (39%) more confident than women (26%)
- 20% expect to receive financial aid from the Bank of Mum and Dad.
- But pensions are feeling the strain, Prudential’s research found. Around 21% say they have not started saving for retirement yet while 15% say pension saving does not motivate them and 12% believe pensions are irrelevant to millennials.
- Near 17% of under-35s say buying a house is a not a realistic option currently
- 11% say saving for a house deposit is not a priority.
- Research also showed that one in seven 35-54-year olds have given up on the hope of ever owning a home.
Kirsty Anderson, retirement income expert at Prudential, said: “Juggling buying a house with saving for retirement is challenging and it is inevitable that something gets dropped which unfortunately appears to be retirement saving.
Retirement can seem daunting for millennials and is of course a long way off when you are contending with student debts and high rents. However, it is crucial to start saving for your pension as early on as possible, putting away as much as you can each time. It is easier if you start doing this as soon as you start working so you get used to the money going straight into your pension pot. Many will at least be saving through the workplace, which is a good start, and contributions should be regularly reviewed to ensure a significant fund can be built up.”