Shayla Reid asks how the pensions industry can engage Gen Z with long-term savings.
If you asked someone from Gen Z - those people born after around 1995 - what they think of saving for a pension, you'd probably hear words like ‘far-away', ‘complex' and ‘unnecessary'.
As a fellow member of Gen Z, I speak from experience when I say the majority of us are just not thinking of saving for the important things, especially not for retirement. As vital as having enough money for a comfortable future is, we either do not know or do not fully understand the gravity of ensuring that we start saving as early as possible to have substantial income in old age.
But there are reasons deeper than our relaxed approach to life that explain why young people aren't contributing as much or anything at all towards their pension.
Lack of knowledge
The fact is that young people just don't have extensive access to pension information. Barely any of us know that you have to be at least 22 and earning at least £10,000 before you can be automatically enrolled into your workplace's pension.
We're not taught about long-term savings in school, and the channels that are feeding messages about retirement clearly aren't reaching us. Perhaps if the pensions industry targeted the media that we're consuming - Infogram and Love Island for instance - we'd be more likely to take note. Major brands have picked up on the popularity of social media and how to use it to their advantage, I think it's time that financial companies started as well.
But what can Gen Z do to help themselves?
Short on funds
First, they shouldn't opt-out. Many of us can relate to looking at our first payslip and feeling disappointment when seeing the deductions - it's easy to want to opt out of your employer's pension scheme, but keep in mind that this is highly unadvisable. The current minimum contribution is 8% - 5% from you and 3% from your employer, with opportunity to increase yours should you want to. But if you're struggling to make ends meet in between pay days, keep your contributions at the minimum and if/when your financial situation changes, you can always increase it.
Resources
If you're a Gen Z wondering where to get some pension information, there are plenty of places that can break it down. The Young Money blog is a great way to start learning about long-term savings in a way that makes sense to you. There are also a number of money podcasts - such as the one run by Money to the Masses - you can listen to if you like to take in knowledge on the go.
Shayla Reid is a public relations student at Bournemouth University. She is currently completing a work placement at Royal London and spent a day working at Professional Pensions in June 2019.
