Property trumps pensions for millennials
Millennials are putting the chance of owning their own home over the ability to live comfortably in retirement, according to Prudential – and they risk a lower income in old age as a result.
The financial giant found that over a third (35%) of millennials say they prioritise saving for a deposit on a home instead of their retirement.
Nearly a fifth (19%) say buying a house is the main reason they don’t save more into their pension while 10% say student debt stops them saving into a pension.
One in 11 admits that frequently changing jobs affects their ability to make regular pension contributions.
The deposit challenges
Younger people are willing to make sacrifices for homeownership, with one in 10 living with parents instead of renting to help save more money for a home. The study found men are almost twice as likely (20%) to move home compared to women (11%).
On average nearly a third (31%) expect to buy their first property by the age of 30, with men (39%) more confident than women (26%) they’ll achieve their ambition.
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.”