Research by Hymans Robertson has showed that under a matched-contribution structure, younger employees could potentially wait more than a decade to save for a deposit, while a fixed employer contribution structure could shorten that timeline by several years.
Modelling a 25-year-old earning £30,000, the findings showed the impacts that a range of different scheme designs can have on the timeline for younger employees to get onto the housing ladder and on their broader pension and total wealth.
The analysis also showed that employers can use the way they link contributions as a simple lever to support their members. By separating employer pension contributions from employee matching contributions, they’d allow younger employees to save for both a home and their retirement.
Additionally, by paying a fixed contribution, employers can give members more flexibility early on, while still providing consistent pension support, enabling young people to build a deposit without abandoning pensions altogether.
Hannah English, head of defined contribution corporate consulting at Hymans Robertson, says: “Young people are under financial strain from multiple angles. They have to contend with rising living costs, whilst building a pension pot and saving for a house deposit. What our research really shows is that the design of a pension scheme can make a genuine difference to how manageable big financial decisions can be for younger employees.”
The Hymans Robertson report also cited Student Loans Company data showing that as of 2025, the average graduate in England enters the workforce with £53,000 of student debt. Additionally, in 2000, the average house cost around four times median earnings, while in 2025 it is closer to eight, according to the Office for National Statistics.
The Hymans report also noted that outside the public sector, individuals starting work today are highly unlikely to join a defined benefit pension scheme. That means many young people need to start setting aside enough money for DC pension contributions to ensure an adequate retirement income.
