Phoenix Group revealed that six in ten millennials struggle to save for their retirement due to childcare responsibilities.
The savings and retirement business discovered that millennials, between the ages of late 20s to early 40s, were twice as likely as any other generation to give childcare as an excuse not to save for their retirement.
In a survey of about 4,000 adults, 59% of the millennials said they hoped to be able to save more money in the future. This compares to 48% Gen Z workers and only 39% Gen X. One quarter of respondents cited income changes as the primary reason for not saving enough money. A similar percentage said that childcare prevented them from budgeting for retirement contributions.
One in five millennials ranked paying into a retirement plan as a top priority. Only a small percentage of millennials said that financial pressures in the last year had caused them to reduce (7%) or stop (7%) their pension contributions.
Phoenix stated that the “life events” of this generation caused significant disruptions to their ability save. Some of these include parental leave, paying nursery fees, becoming a home owner, or changing careers.
The company’s previous research found that men start saving more than women in their pension at 25 years of age and the gap grows until men save 50% more each month by the time they reach 45-54 years.
Patrick Thomson, the head of research, analysis, and policy at Phoenix Insights said that the stereotype of millennials as a spendthrift group is familiar, but they are far from being the avocado on toast generation.
As a millennial, I understand the pressures that many face at this time when weighing competing priorities. We are pulled in different directions. It can cause people to prioritize day-today necessities, like housing and childcare, over long-term goals.
He said that the low number of employees who stopped or paused contributions was a sign of the importance of having employees opt into pensions by default.
He said that, “If people do not readjust their saving once they have overcome a short-term challenge in the financial world, they may end up with less money than they had hoped to retire.”
Employers also play an important role in helping their employees maintain retirement savings during key life stages. This includes continuing employer contributions while on parental leave.
Subscribe to our weekly HR news and guidance
Every Wednesday, receive the Personnel Today Direct newsletter.
Personnel Today offers a range of compensation and benefit opportunities.
Browse other compensation and benefits jobs
