Engaging with millennials - the key to tackling pensioner poverty?

Unexpected costs for care, or supporting children and grandchildren, means that far too many struggle to meet the ever increasing cost of living. With retirement set to last an average of 30 years, it is worrying that some people are running out of money before they have even reached the half-way mark. When we consider the fact that people will be living longer than the current over 75s, the situation becomes more precarious for those saving for retirement now. Fortunately, time is on their side.

So how can the adviser community help address this issue and encourage younger generations to save for their future?

The industry needs to target and educate millennials now. The trick to not running out of money in retirement is saving more, preferably from an early stage of working life. The expertise of an adviser can ensure that those saving for their retirement today are able to build up a pension pot large enough to support themselves through the entirety of their retirement.

When it comes to saving for retirement, millennials face a completely different set of challenges from their predecessors. The lucrative final salary schemes that many people took for granted in the past have gone. These have largely been replaced by Defined Contribution pensions which place emphasis on the individual to ensure they are saving enough. However, consumers now have greater flexibility to use the proceeds as they see fit on reaching retirement, so advisers must be prepared to show them the options available.

Recent ONS statistics show evidence of an improving economic situation for young people in the UK, meaning they are in a better place to set aside savings for the future. The Government appears to be actively steering them to do so with the recent introduction of the LISA, designed to encourage greater long-term saving. Indeed, auto-enrolment is also having an effect on raising awareness of pension savings for the millennial generation, with younger workers being entered into a pension scheme by their employer.

Additionally, the FAMR has offered recommendations for advisers to engage with millennials by developing appealing technology which promotes long-term financial planning. This should enable advisers to service a wider number of less affluent clients profitably.

Millennials hold the key to their retirement success now. Recent research from Aegon found that millennials are the most optimistic about retirement. Given the range of options in front of them, and the time they have to accrue a pot, they should be. So engage with them now and show them their future.