A new report from Standard Life shows concern among millennials’ not saving enough for retirement. According to the findings, two-thirds (66%) of millennials are worried about falling short financially in retirement.
So, what’s driving this anxiety?
Unsurprisingly, short-term financial pressures are playing a big role. Inflation tops the list, with 73% of Millennials citing it as a concern, while 53% are troubled by rising interest rates – both of which are squeezing budgets and making it harder to think long-term.
But it’s not just millennials feeling the pinch. The Standard Life study reveals that 60% of Gen Z and 57% of Gen X are also worried about their retirement savings. However, concerns over interest rates are more muted among these groups – 48% for Gen Z and just 29% for Gen X.
Meanwhile, baby boomers appear more confident. Only 24% are concerned about having enough saved, and just 14% are worried about rising interest rates. The study suggests this may reflect generational differences in pension access. Boomers are more likely to have had defined benefit (DB) pensions, while younger generations are largely reliant on defined contribution (DC) schemes introduced after auto-enrolment began in 2012.
Inflation, however, is a nearly universal concern. Alongside millennials, 73% of Gen Z, 67% of Gen X, and 56% of baby boomers expressed worry about rising costs eroding their savings.
Millennials are in a unique life stage – many are buying homes, raising children, or building careers – all while facing today’s economic uncertainty. But despite the pressure, there’s still time to turn things around.
Standard Life’s research offers a hopeful outlook. A millennial earning £25,000 a year and contributing the minimum through auto-enrolment (5% employee, 3% employer) from age 22 could build a retirement fund of £210,000 by age 68, assuming 2% annual inflation.
Small changes make a big difference:
- Increasing contributions by just 2% at age 30 could grow that pot to £252,000—an extra £42,000.
- Waiting until age 35 or 40 to boost contributions would still add £36,000 or £30,000 respectively.
Active Chartered Financial Planners’ Joe Carey says “As an independent financial adviser – and also a millennial, I am not surprised by the findings in this piece. Many millennials face a perfect storm: high living costs, student debt, and irregular income patterns that make long-term saving feel like a luxury rather than a priority. But the earlier individuals engage with financial planning, the greater the benefit from compound growth and tax-efficient strategies such as pensions and ISAs. A key part of my role is helping clients to take practical steps, even small ones, to build sustainable retirement plans that reflect their lifestyle now and their goals for the future. Addressing this gap in savings isn’t just about money; it’s about creating confidence and control over what lies ahead”
Take Control of Your Future Today
Many of us are facing unprecedented financial pressures, but small, consistent actions can make a powerful difference over time. Don’t wait for the “perfect” moment – start your financial planning journey now. Every step you take today builds a more secure tomorrow.
Do you need help getting started? Contact Active Chartered Financial Planners to create a personalised retirement strategy that works for you.
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Sources and information provided by Standard Life
Key:
Baby boomers born between 1946 and 1964
Gen X born between 1965 and 1980.
Millennials those born between 1981 and 1996
Gen Z those born between 1997 and 2012
Statistics and report courtesy of Standard Life
