As pressure mounts on middle class professionals and savers, AXA's latest global survey reveals that younger Brits are turning to financial self-help to fund retirement.
AXA's fifth bi-annual global Retirement Scope survey, which will be published in full next week, charts the savings and investments behaviour of over 30,000 consumers globally.
Younger consumers appear to be coming to terms with the prospect of less government support and increasing longevity to take more personal responsibility for their financial well-being. AXA believes the survey highlights significant opportunities for IFAs, and calls on the industry to respond to the needs of younger consumers by:
- Working to professionalise the industry in order to build consumer trust
- Bringing to market innovative products that are flexible to adapt to the changing needs of consumers throughout different life stages
- Investing in technology, systems and marketing that appeals to younger audiences that may have been marginalised from the traditional wealth management sector.
Just one in five (21%) younger consumers expects to rely on the State pension in retirement. In contrast, the babyboomer generation still appears to have faith in the statutory system; around half of older Brits who are close to retirement say they expect the State to provide the bulk of their retirement income.
Mike Morrison, head of pensions development, AXA Wealth, said: "The onus is increasingly on individuals to plan better and save earlier if they want a good standard of living in retirement. This means more education is needed; our industry has a huge role to play, for example in collaborating much more closely with consumer groups and universities, to make sure that younger people are adequately prepared for the reality of DIY retirement."
Younger Brits also appear to favour greater reliance on personal savings and investments over working for longer. Around half (48%) of this age group say they would be willing to consider increasing their own investments and savings in order to ensure sufficient income for retirement.
This is followed by a preference for a mandatory rise in statutory contributions, with over one third accepting this as a preferred choice.
In contrast, changes to the retirement age - either enforced by the State or made as a personal life choice - are far less popular with this age group; just 4% would be happy with a rise in the state retirement age in order to secure retirement income.
