Millennials must plan for their financial future or run the risk of being plunged into poverty.
This is the warning from several experts, who claim young people today will have limited or no safety net to fall back on in later life and must get to grips with financial planning.
Keith Churchouse, IFA & co-founder of Surrey-based SaidSo.co.uk, says: "It’s unlikely that anyone else, including the state, is going to have much money to help millennials in the future if things go wrong or when they retire."
He adds that although more people are now saving something for their later life through auto-enrolment and workplace pensions, it’s not going to be enough to give them a secure nest egg.
Mr Churchouse adds: "Saving for the future, in whatever format through an Isa, property or shares, is usually worth it and many understand that at retirement, their income is unlikely to come from just a pension."
There are many pressures faced by young people, which often prevents them from accessing financial advice to buy a house or save for their retirement. In fact, recent research from the Department for Work and Pensions has found that financial confidence in the younger population is low, with more than one-in-four under-30s confessing to knowing little or nothing about pensions issues.
This problem is compounded by the increase in life expectancy, which means they also need to have a bigger savings pot for their later life. According to the recent ONS: Expectation of life, Principle Projection report, in 1987 life expectancy for a 25-year-old man was around 49 years, but in 2017 it is 56 years.
This marks an increase of nearly 15 per cent. At the same time, the proportion of the population likely to be earning and paying taxes relative to those who are older and likely to be retired is decreasing.
During the next 35 years, 25 per cent of the total population in the UK is projected to be aged over 65, compared with 18 per cent in 2015. By 2050 those aged between 16 and 64 are projected to decrease from 63 per cent to 57 per cent, according to National Infrastructure Commission.
Previously, many experts argued that a lack of trust or cost hindered people’s chances of accessing financial advice. But Phil Brown, head of policy at LV=, says it is also because many millennials are hitting financial goals later on in life.
He adds: “This generation is finding themselves growing up in an era of poor savings rates and relatively static wages which makes financial planning more important than ever.
"Getting a mortgage was traditionally someone’s first touch-point with a financial adviser and was often the catalyst to consider products such as income protection, and understand the value of advice. But the rise of Generation Rent means fewer people are going through this stage.
