Retirement needs seem to be something of a mystery for today’s youngsters. According to a study released today by bank BNY Mellon and students from Cambridge Judge Business School, 42 per cent of UK millennials calculate the size of the retirement fund based on a blind guess.
A further 51 per cent admit to employing some educated guesswork to figure out the amount they will need in their pension pot.
The report, entitled Generation Lost: Engaging Millennials with Retirement Saving, also revealed that 48 per cent of UK millennials do not receive any information on financial matters from their workplace or educational establishment, despite many wanting to know the truth about what needs to be done to prepare for a comfortable retirement, regardless of how bleak the reality might be.
Meanwhile, 70 per cent said they would be more inclined to save more into a pension if they were allowed to take multiple lifetime withdrawals.
“High student debt, low job security and low global growth mean millennials face a different set of financial challenges than the baby boomers and Generation X,” noted Paul Kelly, a graduate from Cambridge Judge Business School and joint-lead researcher for the study. “It is therefore crucial that financial services providers understand how they can empower millennials to save for their retirement.”
And Paul Traynor, head of insurance for EMEA, APAC & LatAm at BNY Mellon, added: “Without a new approach, we face a real risk that the millennial generation will become Generation Lost – lost both to the financial services industry and in terms of its own readiness for retirement.
“Millennials say they want more meaningful engagement with insurers and other financial services providers and to be told the truth about how poor they may be in retirement if they do not start saving early. They are ready to hear more confrontational, honest and realistic messages about the challenges they face in providing for their retirement.”