Six in ten millennials or 59 per cent in the UK struggle to save for retirement, the highest among all generations, according to Phoenix Group.
This compares to 48 per cent for Gen Z and 39 per cent for Gen X. A quarter, or 25 per cent, of this group claim income fluctuation is the primary cause, while a comparable amount, 24 per cent, cite childcare duties. Millennials are twice as likely as any other age group to list childcare as a cause for not saving for retirement.
According to the research, millennials struggle to save because of expenses such as maternity leave, childcare, property ownership, and employment changes.
The research also found that most millennials prioritise short-term financial requirements before pensions, with only 20 per cent putting pensions first.
Women are particularly affected since they frequently take on extra caregiving responsibilities with men saving 50 per cent more for retirement than women by 45 to 54.
Phoenix Insights head of research analysis and policy Patrick Thomson says: “The stereotype of the spendthrift generation is all too familiar when it comes to millennial finances, but the reality is far removed from the ‘avocado on toast’ tag placed on them. As a millennial myself, I know first-hand the pressures many at this stage face weighing up competing priorities that pull us in different directions. This can lead to day-to-day essentials, such as housing or childcare costs, being prioritised over longer-term savings goals.
“The research finds some millennials have decreased or stopped pension contributions entirely but the numbers doing this remains low, underlining the benefits of people being opted-in to pension saving as default. However, there is a risk that if people don’t readjust their savings once they have got through a short-term financial challenge they will reach retirement with much less than they’d hoped for.
“As many as 17 million people are not saving enough for the retirement they expect so it is important people take steps to address saving gaps where possible. Employers also play a vital role in supporting their staff to maintain retirement saving at key life stages, including continuing employer contributions during parental leave.”