Gen-Z professionals ‘ignoring pension saving’

Many young adults might be forced to delay their retirement because they aren’t saving for later life.

According to research by recruitment agency Robert Walters, 21% of Gen-Z employees don’t contribute to a pension scheme.

Meanwhile, 18% of Gen-Zers say that saving for retirement isn’t on their mind right now, and just 56% currently consider pensions to be important.

Gen-Z spans people aged between 12 and 27, so the oldest people in this age group could have about ten years of full-time employment under their belts.

This means that by failing to save, many will have missed out on a decade’s worth of compound interest, as the sooner you put money into a pension, the longer it has to grow.

It might also mean that they don’t have the means to retire when they want to and will have to work for longer.

Even many of those who have set up a pension aren’t always saving as much as they should.

The survey found that more than half of Gen-Z workers have paused their pension contributions at some point, as they needed the money straight away.

Although many Gen-Z professionals will have been auto-enrolled into a workplace pension, that doesn’t mean they’re getting generous contributions from their employer.

In fact, 31% are on statutory minimum employer pension contributions, which means they’re the most likely age group to get the bare minimum of 3%.

They’re also far less likely to receive contributions of between 7% and 10%, as less than a quarter get this amount, compared with almost half of Gen-X workers - those born between 1965 and 1980.

Responding to the figures, Chris Eldridge, chief executive of Robert Walters UK and Ireland, urged younger workers not to overlook pension saving.

“Pensions aren’t something that you should start only considering as you get closer to retirement age,” he said.

“You should be putting something aside from the first day of professional employment.”

Mr Eldridge warned that otherwise, young professionals could have insufficient savings further down the line and be forced to postpone their retirement.

He added that employees aged under 30 are at a “crucial time in their career to craft a solid foundation for their pension pot”.

According to the Robert Walters study, 82% of Gen-Z workers think bonus schemes are the most important financial benefit when weighing up a job offer.

That’s a higher proportion than in any other age group.

However, figures showed that they are also the least likely to be eligible for any extras, such as a car allowance or an annual bonus.

Since Gen-Zers are also more likely to be on lower salaries than their more experienced colleagues, this could partly explain why saving for the future isn’t top of their agenda right now.

Nevertheless, Mr Eldridge believes younger workers could still think about what perks may be available to them later on when they’re making career choices.

“Right now, every penny counts,” he said.

“So it’s vital when considering a new job offer that professionals weigh up what potential employers can offer them in the long-term.”

Mr Eldridge added that if employers offer “meaningful financial benefits” beyond the base salary, they can give employees a better chance to save for a secure retirement.

This, he said, would be “repaid with better attraction, retention and company loyalty”.