Thursday, September 16, 2004

Pensions are for oldies

This may only be a UK phenomenon but whatever it is scary.

Between 2002 and 2003 there has been a drop in the number of under-35 year olds saving for pensions. Not just a tiny little drop but a huge fall. 13% less men and 12% women in this age group have dropped out of saving of a pension in a single year! The percentage of 45-64 year olds increased by around 7%

The drop in contributions means fewer than 14 per cent of the 14.9 million Britons aged between 16 and 35 were saving into personal or stakeholder pensions in the 2003 financial year — down from almost 16 per cent in 2002.

Why is this? Well pension investments haven’t been doing too well so I can well understand people being disenchanted with them (me included) but these are people who taken the proactive decision to stop paying.

I suspect it is more to do with that age group desperately trying to raise the funds to buy a property, combined with impact of their very high levels of credit card debt. Whatever the reason it is questionable whether they will regain the pension habit.

So bad luck you financial services companies who have been focusing on this young age profile – bad choice, bad choice.

This data is published by the Inland Revenue. Dick Stroud www.20plus30.com

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