23 Dec 2019 4 min read

Four persistent myths about younger DC savers

By SuAnn Song

Are millennial investors really challenging saving stereotypes when it comes to retirement? A PLSA survey of post-2012 auto-enrolment savers carried out in early 2019 threw up some interesting findings. We tested if four commonly-held opinions stand up to scrutiny.

  1. They can’t afford to save for retirement. The post-2012 generation like auto-enrolment, with 70% saying that paying into their pension was currently affordable.


Source: Generation AE (auto-enrolment): Quantitative Consumer Research, PLSA, August 2019

2. They don’t believe in saving more for their retirement. By contrast, 54% said they would like to contribute more.

3. They’ve given up on getting on the property ladder, ever. They may be ‘Generation Rent’ but this cohort want to own property, currently more so than any other generation. 34% valued saving for retirement through property, and 28% by paying into their pension, versus the broader working age population which said 20% and 31%, respectively. Over 45% said they were planning on using their property as retirement income, even though less than 20% owned any. By contrast, over 60% of people already retired own property and 15% plan to use it as retirement income.

Source: "The Home Stretch: property as retirement income", PLSA 2017

4. They’re totally disengaged. Over a quarter (27%) actively seek out information on retirement when they need it.

And there were some findings which might surprise you less:

i. They highly value their employer’s contribution. Their willingness to contribute depends on how much the employer is contributing relative to the employee, as well as the amount contributed. The survey indicates that employee contributions could reach as much as three times higher than employer contributions – at 9% versus 3% - before half of those polled would cease saving into their pension.

ii. They don’t want information overload – simpler is best. 55% say they struggle to understand the information received on their pension.

iii. Auto-enrolment is viewed as a positive government initiative, but younger DC savers think the government should take a great deal of responsibility to ensure people understand how much they need for retirement (over 77% of post-2012 auto-enrolment versus about 65% of the general working population).

The reality is, millennial investors are actively thinking about retirement. This presents an opportunity for employers, governments and pension providers to engage with them more on the issues that matter to them.



SuAnn Song

Solutions Strategy Manager

Su focuses on developing investment solutions and thought leadership for DC clients. She joined LGIM in January 2019, having previously been an investment consultant at PwC, where she worked with pension funds, charity and university clients in formulating investment strategies and portfolio modelling.

SuAnn Song