Building your pension is probably not that high on your list of priorities, especially if you are at the beginning of your career. Let’s face it, sorting out your pension is not the simplest or most glamorous of tasks. It is however hugely important that you start planning for retirement early, or you run the risk of not having enough saved to live comfortably in retirement.
A recent study has shown that one in 6 people aged between 18 and 35 do not know if they will have accumulated enough in their pension fund to provide for their retirement. Young workers are often more focused on living for now rather than preparing for their retirement, and that is understandable, it is difficult to get excited about something that might not happen for 40+ years.
A whopping 44% of 18-34 year olds have claimed to have no pension provision and have cited poor knowledge of pensions as the reason. The report also highlights fears when it comes to retirement. Under 35s are sceptical about the likelihood of the state pension existing in the future, with over a third believing it will cease to exist at some point due to lack of funding. This underlines how important it is to start saving now!
Good financial and healthy money habits can be difficult to develop at any age, especially for the young. Isn’t it time the pensions industry enters the 21st century and starts to engage young workers?
While we agree that the industry needs to do more, young workers must also take responsibility for their future. Try to analyse how much money you have coming in each month, how much you spend and how you spend it. Create a simple budget and identify how much of your wage you can afford to save each month.
Auto-enrolment has recently come into force across the UK, meaning your employer automatically makes a contribution to your pension, unless you chose to opt-out. As an employee you can set a percentage of your wage to be added to your employers contribution to your pension fund. From your budgeting exercise you should be able to identify how much you can afford to contribute. Just by having a clear view of our financial accounts goes some way in taking responsibility for our financial futures.
At polkadotfrog, we are committed to improving the working environment for future generations by highlighting these issues and ensuring both employers and employees are well informed.