Millennials can be one of the most reluctant groups when it comes to talking about pensions. High rents, low salaries, a competitive job market and an ever-rising cost of living has hit this generation hardest. So how can you engage with the 20-somethings to get pensions on their radar?
The Financial Times got into hot water last year when an article suggested they need to save an average of £800 per month if they want to have a pension fund of £30,000 a year upon retirement. The social media backlash was imminent, with many millennials pointing out that they can barely afford rent and are not (as insinuated by the FT and other news sources at the time) spending their spare cash lavishly.
We will not get far boring or frightening this fantastic generation. They have so many other things they can spend their time on that it’s better to truly inspire them. Helping them get money in order, having a plan for this year and the next five will be more likely to help them visualise why planning for the long-term future is important.
Auto-enrolment has happened to millennials, not with them and therefore we need our forward-thinking HR managers, benefit professionals and leaders to see the gaps this generation have. Once we have built on the basics and the day to day needs we can progress to helping them see planning their future early as a positive important goal. Until they feel comfortable with this month, this year’s finances there is no point explaining how brilliant the current tax relief on pensions is. Until they feel confidence with today’s money this generation will find something more interesting to engage with other than what they be living on when they are in their 60’s.
A quick win when it comes to persuading millennials to stay in pensions, and maybe increase their auto-enrolled payment in their 20s, rather than later in life is to explain the matching from their employer. Seeing it as the best thing to do with that “bit of pay” and how it can often almost triple if put into a pension with tax relief and matching gets them talking and showing interest
Going further and helping them save more from their monthly budget to put away will never be something they regret doing. But remember this is the experience generation so they will be keen to still enjoy today. Using employee benefits and discounts to improve their budgeting and free up some cash is a double win.
Right now, it’s about opening the money discussion, not lecturing. Being auto-enrolled into a pension is an ideal starting point to open that discussion and help millennials believe that their future is worth the investment now – even if it feels too far away to think about. But often it means sorting out todays money to be brave enough to consider the long-term future. Let’s not put this generation off altogether.