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28/10/2003
'No Nest Egg' youth have no confidence in pensions: report
The government must go back to the drawing board and design "simple, affordable and secure savings solutions" for young people if it expects to restore public confidence and sort out the pensions crisis, according to the National Consumer Council (NCC).
In its research, 'No Nest Egg' published today, the NCC examined the attitudes of under-35s to saving for retirement, and found that the younger generation were without a nest egg and face a tough middle age, working hard to catch up on saving.
The study revealed how young people on low incomes face" significant barriers" to saving that put any prospect of a comfortable retirement at "severe risk". They have little confidence that their saving will pay off, and their trust in government on pensions is so low that any moves to force them to save for retirement would be unpopular, the report said.
The NCC has called on government to tackle the growth in personal debt before expecting people to save in pensions. New savings mechanisms were also recommended to make pensions a reality for young people.
NCC chairman, Deirdre Hutton, said: "Thanks to the recent decline in good quality occupational pension schemes, low returns for savers, and the dwindling purchasing power of the state pension, government policy requires young adults to start saving for retirement earlier than their parents. But the reality is that this is not happening. Only one in every three under-30s is putting money aside for their old age. A no-nest-egg generation is emerging.
"Young people are aware of and unsettled by the pensions crisis, but they are suspicious of solutions that mean they must make big sacrifices today with no guarantees that this will bring them any real benefit tomorrow."
The report also recommends that government offer people better financial incentives to save along the lines of the Child Trust Fund. A progressive lump sum to kick-start a personal savings fund was popular with the young people the NCC talked to.
An adequate, secure and simple state pension was also key to enhancing confidence pensions.
(gmcg)
In its research, 'No Nest Egg' published today, the NCC examined the attitudes of under-35s to saving for retirement, and found that the younger generation were without a nest egg and face a tough middle age, working hard to catch up on saving.
The study revealed how young people on low incomes face" significant barriers" to saving that put any prospect of a comfortable retirement at "severe risk". They have little confidence that their saving will pay off, and their trust in government on pensions is so low that any moves to force them to save for retirement would be unpopular, the report said.
The NCC has called on government to tackle the growth in personal debt before expecting people to save in pensions. New savings mechanisms were also recommended to make pensions a reality for young people.
NCC chairman, Deirdre Hutton, said: "Thanks to the recent decline in good quality occupational pension schemes, low returns for savers, and the dwindling purchasing power of the state pension, government policy requires young adults to start saving for retirement earlier than their parents. But the reality is that this is not happening. Only one in every three under-30s is putting money aside for their old age. A no-nest-egg generation is emerging.
"Young people are aware of and unsettled by the pensions crisis, but they are suspicious of solutions that mean they must make big sacrifices today with no guarantees that this will bring them any real benefit tomorrow."
The report also recommends that government offer people better financial incentives to save along the lines of the Child Trust Fund. A progressive lump sum to kick-start a personal savings fund was popular with the young people the NCC talked to.
An adequate, secure and simple state pension was also key to enhancing confidence pensions.
(gmcg)
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Northern Ireland WeatherToday:It will be cloudy again throughout the day. Mainly dry in the morning, but patchy drizzle in places, becoming more widespread and persistent in the afternoon. Freshening southwesterly winds. Maximum temperature 12 °C.Tonight:Cloudy with a spell of heavy rain pushing south through late evening and the early hours, followed by some clear spells. Minimum temperature 6 °C.
