Press Release – June 2024

Majority fear waning state financial support for retirement yet under 50s don’t prioritise retirement planning

New findings published today by the International Longevity Centre UK (ILC) and M&G plc, in advance of their Retirement Income Summit on Thursday, highlight significant generational disparities in wealth accumulation, raising concerns about intergenerational fairness and the future of the intergenerational contract.

A YouGov survey of over 2,000 adults, commissioned by the ILC and M&G, revealed more than half (55%) of respondents over 25 believe government support for older generations will decrease by the time today’s younger generations reach retirement age.

Faced with a hypothetical £10,000 windfall, there was a strong appetite for savings more generally with almost three quarters (73%) of respondents aged 18 to 24 and half (50%) of those aged 25 to 49 say they would put a portion into savings.

However, less than one in 10 respondents aged 18 to 49 said they would save a portion for retirement (8% for those aged 18 to 24 and 9% for those aged 25 to 49). In comparison, a third (31%) of those aged 50 to 64 would save a portion for retirement.

Further ILC analysis indicates that older generations have disproportionately benefited from wealth increases in the past decades. From 2010/11 to 2019/20, people aged 55 to 64 saw their wealth increase by 39%, and those aged 65 to 74 experienced a 58% rise. In stark contrast, younger generations aged 35 to 44 saw their wealth grow by a mere 4%.

These findings suggest the urgent need for policy makers and the industry to assess the policies and financial products that are in place to ensure more of us can save for retirement.

The survey also found:

• Few people believe that wealth in the UK is fairly distributed. This is particularly the case among younger generations, with more than 1 in 2 people under 50 feeling that older generations receive a disproportionate share of wealth (58% of those aged 18 to 24 and 53% of those aged 25 to 49).
• There is consensus among younger and older generations, with both feeling current government spending on their generation is too low. 71% of those aged 65 and over feel the government is currently spending too little on their generation, while 65% of people aged 18 to 24 felt government spending on their generation was too low.
• Younger people are also more likely to want to invest in stocks and shares: with 18- to 24-year-olds three times more likely to say they would invest part of a hypothetical windfall than people aged 50 and older (27% versus 9% for people aged 50 to 64).
• And more than half of respondents (51%) aged 18 to 24 said they would put a portion towards housing, such as saving for a deposit, paying rent or mortgage, compared to just 5% aged 65 and over.

Dr Vivien Burrows, Senior Research Fellow at the ILC said,

“The generational wealth gap must be addressed – and quickly – to make sure there’s equitable financial opportunities for future generations. We need long-term policies that take the concerns and circumstances of different cohorts seriously, and don’t just pit generations against one another.

“We must tap into what motivates practical savings and investment behaviours and ensure that all people benefit from financial security across our longer lives.”

Clive Bolton, CEO Life Insurance at M&G said

”These findings show that the savings culture is far from broken, busting the myth that younger generations are spenders and not savers. Through necessity rather than choice, younger people are focusing on near-term priorities which will in turn result in different retirement needs.

“Policymakers, companies and wider society will adapt their thinking as the intergenerational contract resets to keep pace with changing societal and economic trends. By creating innovative savings and retirement solutions, we can strengthen the intergenerational contract and put it back on the map.”

The ILC’s Retirement Income Summit on Thursday 13 June 2024 will consider the bold changes Government and industry needed over the next decade.

For more information or to register for the event at M&G’s offices in London on Thursday 13 June 2024, please click here or go to https://ilcuk.org.uk/retirement-income-summit-2024/

Ends

Contact

Press@ilcuk.org.uk or +44 (0) 7736 124 096. Spokespeople are available on request.

M&G – mandgpressoffice@mandg.com Spokespeople are available on request.

Notes

What is the intergenerational contract? The intergenerational contract is the principle that guides our welfare system. It means that someone who pays in, whatever their age, at whatever stage in life, feels confident that they will benefit.

All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,054 adults. Fieldwork was undertaken between 15th – 16th May 2024.  The survey was carried out online. The figures have been weighted and are representative of all UK adults (aged 18+).

The ILC’s Strengthening the intergenerational contract project, supported by M&G seeks to explore people’s perceptions and experiences of intergenerational inequalities, with a view to identifying solutions that will help strengthen the intergenerational contract and support the wellbeing of all generations. This snapshot summary report presents some early results from a YouGov survey carried out as part of this project.

• You can download the report here: ILC-Intergenerational-fairness-Snapshot-Summary-final.pdf (ilcuk.org.uk)
• And the data tables here: https://ilcuk.org.uk/wp-content/uploads/2024/06/ILC-and-MG-press-release_data-tables.pdf

About M&G

M&G plc is a leading international savings and investments business, managing money for around 5 million retail clients and more than 800 institutional clients in 26 markets. As at 31 December 2023, we had £343.5 billion assets under management and administration.

With a heritage dating back more than 170 years, M&G plc has a long history of innovation in savings and investments, combining asset management and insurance expertise to offer a wide range of solutions. We serve our retail and savings clients under the M&G Wealth and Prudential brands in the UK and Europe, and under the M&G Investments brand for asset management clients globally.