Young workers across the world have the ambition but lack the resources to save for retirement, research has suggested.
The study, The Changing face of retirement: the young, pragmatic, and penniless generation, was conducted by pensions provider Aegon in conjunction with non-profit organisation Transamerica Centre for Retirement Studies. It focused on the state of retirement preparedness among 'twentysomethings' in 12 North American, European and Asian countries.
It found that future retirement shortfalls among workers in their 20s were due to a lack of opportunity to save rather than a lack of will.
Of the 2,700 'twentysomethings' polled, the single biggest obstacle preventing young people from saving for retirement was lack of cash to invest. Another obstacle to retirement savings cited by one-eighth of respondents was the lack of education either not knowing how to invest for the long-term or the complexity of investment products, charges and fees.
TCRS president Catherine Collision said: 'For twentysomethings, retirement is decades away. However, by making saving a priority today, their long-term savings horizon will help their savings grow with the compounding of investments over time.
'Getting into the habit of saving is not easy at any age but the longer one waits, the harder it will be, especially with the need to make up for lost time,' Collision said.
Turning to incentives, the study found that greater remuneration packages would encourage 20- to 29-year-olds to save for retirement.
Collision continued: 'Twentysomethings are ready and willing to take responsibility for their financial futures, but need the support of employers, retirement providers and governments to help them achieve their retirement goals.'
Initiatives that could make a difference include better workplace retirement benefits, financial information that is straightforward and user-friendly, and more generous tax incentives, she said.
As such, over half (57%) of workers in their 20s said a pay rise would encourage them to save more for retirement. While a more generous employer who matched contributions in a workplace retirement plan could also encourage savings, with one-third of twentysomethings citing this as valuable.
The study also noted that governments could help lead the way through the creation of stable, long-term financial and taxation policy. A third of twentysomethings (34%) stated that more generous tax breaks on long-term savings and retirement plans would encourage them to save.
