Personal Finance

Young 'must be encouraged to save'

A think tank is calling for adequate measures to encourage young people to set aside more money, warning that without savings they could face an "unsustainable future".

A report by the International Longevity Centre-UK said rising life expectancy, growing care costs and the effects of an ageing population mean that the need to save for retirement is greater than ever.

The group highlighted the importance of creating a savings culture among young people, and said that a 'savings rule of thumb' should be developed.

According to the think tank, authorities should also further promote current incentives to save, such as tax relief on pension contributions.

In order to inspire young people to set aside more money, easier methods to save into a pension should be introduced, the group added.

But it warned that the Government may need to go further and introduce a plan B in case young people opted out of auto-enrolment into pension schemes when the move is introduced in October next year.

Dr Craig Berry, senior researcher at ILC-UK and author of the report, said: "Planning for retirement may be an alien concept for many young people, but delayed transitions to adulthood in terms of owning a home, establishing a career and starting a family mean that young people need to start saving for a pension now.

"Crucially, however, Government policy to encourage saving must be informed by generational perspective."

Sam Jackson

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