Younger Brits are more likely to take advantage of early access to pension money than their babyboomer parents, according to research from AXA Wealth.
Over 40% of people aged between 16 and 34 who currently invest in a pension said they would like to access their pension pot early. This comes at a time in their lives when many will be contemplating getting on to the property ladder and/or starting a family, so additional funds are generally likely to be welcomed. In contrast, less than 30% of 45 to 54 year olds, the babyboomer generation, said that they would access their pension money early.
However, 58% of younger people said early access would encourage them to increase their current retirement savings contribution, suggesting an overall positive intention toward long-term saving. But, this appears to conflict with the most common reasons cited for accessing savings, which would be to alleviate financial burdens such as paying off debts and avoiding house repossession.
Andy Zanelli, head of technical sales, AXA Wealth, said: “The research suggests that younger people are perhaps focusing too much on satisfying short-term financial goals rather than realising that they may well spend as much time in retirement as they will working. If they access their pension money early – will they be able to fund the lifestyle they want when they retire?
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“It is important that steps are taken to ensure that younger people recognise that long-term saving is as important as ‘living for the moment’. If they would access money early to rectify financial difficulties – what funds would they use if they had to pay back extra into their pensions?”
Becky Holmes, AXA Wealth press office (+44 (0)1256 798310)
Nicola Wraight, AXA Wealth press office (+44 (0)1256 852041)