Generation Z most ‘clued up’ about pension savings

According to research from PensionBee, 23 per cent of Gen Z respondents did not know how much money they’ve saved for retirement, compared to 26 per cent of Millennials and 34 per cent of Gen Xers

Generation Z, those aged 18-23, are the most ‘clued up’ about their pension savings, research from PensionBee has suggested, with Generation X, those aged 41-54 years old, reportedly facing the most uncertainty and doubt towards their pension savings.

In particular, the research revealed that 23 per cent of Gen Z respondents did not know how much money they’ve saved for retirement, compared to 26 per cent of Millennials, those aged 24-40 years, and 34 per cent of Gen Xers.

Moreover, whilst 3 per cent of Gen Z respondents also stated that they had not started saving for retirement, 14 per cent of millennials and 14 per cent of Gen Xers said that they had no private pension savings.

Apart from this, 4 per cent of Gen X stated that they did not understand how pensions work, the highest proportion of all generations surveyed.

Indeed, the findings suggested Gen Xers were facing the most uncertainty and doubt more broadly, with 16 per cent fearing they will not be able to live comfortably in retirement, compared to 12 per cent of Millennials and 5 per cent of Gen Z.

Whilst Gen Xers were “unsurprisingly” found to have the largest pension pots, with an average of £33,547, and the average Millennial pot stood at £22,049, the research also suggested that Gen Z are “hot on their predecessors’ heels”, with an average pot of £21,765.

Commenting on the findings, PensionBee CEO, Romi Savova, said: It's very encouraging to see the younger generation preparing for their future, proving that it’s never too early to start thinking about retirement.

Our research highlights that most savers would like to retire early, so it’s of paramount importance that they build up a personal pension that they can access from the age of 55 (rising to 57 in 2028), in order to not have to keep working until the state pension age of 66, she said.

Indeed, when considering the ideal retirement age, all three generations expected to retire “well” before the state pension age of 66, with Gen Xers highlighting 61 as the ideal age, whilst Gen Z and Millennials agreed on 58.

Gen Z showed a willingness to bring this age even further forward, however, with 11 per cent of Gen Z savers considering not having children so they can retire earlier, whilst 4 per cent of Millennials stated that they would also consider this.

Despite this, all three groups stated that the pandemic had likely delayed their retirement, with around 43 per cent of respondents reporting some delay.

This increased to 67 per cent amongst Gen Z savers who expected a delay of around two years, whilst just 35 per cent of Gen Xers were expecting a delay.

Regional disparities were also highlighted by the research, with Edinburgh identified as the city with the largest average pension savings of £82,000, whilst Glaswegians, just 45 miles away, had the smallest pension saving of £22,900, despite the average salary in Edinburgh being £2,000 less than in Glasgow.