Research carried out by Aegon has suggested that young adults face a significant financial shortfall by the time they come to retirement.
The survey also revealed that only 20% of young adults feel they are on course to achieve the income they need in retirement.
The Aegon Retirement Readiness Survey 2020: Young adults reinventing life, work, and retirement highlighted a concerning disparity between self-reported life expectancy and government figures.
The Aegon report states: “In the UK survey data shows that a young adult has a self-reported life expectancy of 76 years. However, governmental sources reveal an actual life expectancy for a person aged 25 is 88 years. UK retirement age for someone currently aged 25 is 68.
“On average, this person has only accounted for a retirement lasting eight years (68-76), when in reality they are likely to have a retirement spanning 20 years (68-88); a shortfall of 12 years. The youngest generation in the UK would therefore need to save 150 percent on top of what they are already saving to cover the shortfall (i.e., they need to save 2.5x as much).This disconnect potentially establishes a sizeable and significant shortfall in financial security for later in life.”
The good news is that, for young adults, time is on their side. They have the opportunity to make the necessary changes, to ensure they can enjoy a financially secure, healthy and personally satisfying retirement.
But they need to know the truth, the facts, so they can plan accordingly.
That is where Lifetime’s digital service can help.
We are endeavouring to bridge the advice gap by providing all generations with easy and secure access to full financial planning, together with a great digital experience.
The online service is not just for those approaching their retirement years, it is for everyone young or old who wants to understand their financial picture – now and in the future.
University graduate Eve Lodge was one of the first people to go through the digital journey with Lifetime’s customer coaches and financial planners.
She said: “Having just left university at age 22 and starting a post-graduate position I wanted a better understanding of my financial future, and to ensure that I started saving now, into a personal pension, so that I could have options later in life.
“My customer coach, Anji, was extremely personable and made sure I understood all the details of the free financial planning video I received. She helped me every bit of the way before passing me over to my financial planner Miles, who I also found to be engaging, personable and extremely capable.
“Lifetime offer an easy to grasp, accessible service that helps people of my age realise what their finances can and can’t do for them. It has put me on the right path.”
- You can download the young adults survey from Aegon here: