18-35 year olds under pressure - stuck saving for the short term despite long term ambitions | PLSA
18-35 year olds under pressure - stuck saving for the short term despite long term ambitions

18-35 year olds under pressure - stuck saving for the short term despite long term ambitions

26 August 2016

Today (Friday) the Pensions and Lifetime Savings Association (PLSA) released research showing 18 to 35 year-olds’ plans to save for the long-term are curbed by short-term necessity. 

This group is often described as the YOLO (you only live once) generation but our research reveals quite a different profile. Instead of adopting spendthrift attitudes 18-35 year olds want to save, feel they ought to save, but simply can’t.

51% of respondents tell us they get more satisfaction from saving money than spending it and 53% disagree with the idea that they tend to live for today and let tomorrow look after itself. When it comes to debt, the majority (57%) say they do not have any (excluding student loans) and 65% of 18-35 year olds do not acquire any debt on a monthly basis.

Joanne Segars, Chief Executive, Pensions and Lifetime Savings Association, commented:

“18-35 year olds are no different to many people – they want to save for a secure future but short term financial pressures get in the way. And it’s not surprising that without help this group prioritises short-term over long-term saving given the current rock-bottom interest rates and low wage increases.

“Our research suggests many 18-35 year olds shy away from the sort of investments that give better returns over the long-term, but it also suggests that where a financial decision or situation becomes a fact of life, for example student loans, this group quickly accepts it and adapts. We’ve seen this behaviour in workplace pensions with a very low opt out rate from automatic enrolment of just 7% by those aged under 351.

“Those younger savers staying in their workplace pensions are smart. Automatic enrolment provides them with a hassle-free way to save for the long-term – they don’t have to think about the investment strategy, or choosing the product, or moving their money, they just have to keep saving. Their own contributions are doubled by contributions from their employer and tax relief from the government; and they have time on their side – early savings benefit from compound interest, investment growth and time to recoup any losses.

“The good news is a workplace pension is coming to every work place by 2018.”

Money in, money out

Asked what prevents them from saving, 48% say the cost of living is too high and 43% say their salary is too low. One in five tell us they feel their lifestyle stops them saving but this is topped by almost one in three (30%) who say the cost of their rent or mortgage stops them saving.

Good intentions

77% tell us that over the last six months they felt the same or increased pressure to save for the future – only 6% tell us they felt the pressure had decreased.

Some 18-35 year olds are managing to save but typically for the short term: 34% are saving for a rainy day and 32% say they are saving for a one-off purchase such as a holiday, car or TV. 

Property preferred

Given an unlimited sum of money 42% tell us they would prefer to invest in property to get the best return – either buying their own home or investing in additional property. There is comparably little interest in ISAs, or investing directly in the stock market. However, faced with the reality of what they actually have available to save 18-35 year olds give quite different answers with 41% opting for a savings account and 26% choosing a cash ISA. 

They’re student loans not debts

54% of those who have an outstanding student loan tell us they don’t consider it as a debt and only a quarter (26%) say student loan repayments prevent them from saving each month; suggesting student loans have simply become a fact of life for this generation.

Cautious savers

Almost half (47%) tell us that the interest rate offered is an important factor when choosing between saving products and 30% want to be able to access their money at any time with no fees. One in four (24%) say that the financial risk associated with the product is important when choosing between financial products.

Locked out of the long-term

58% of 18-35 year olds agree with the statement that saving products are designed for people who already have money. The survey paints a picture of a cohort of savers who want to save for the long-term, but the reality of the cost of living, low salary levels and housing costs mean it is difficult for them to save.

When they do save it seems they feel they cannot afford to take risks with their savings and opt for the less risky, low-interest options – despite appearing to have an appetite for better returns, telling us they value a good interest rate when choosing a saving product.


 1. Automatic enrolment opt out rates: Findings from qualitative research with employers staging in 2014 - page 5, figure 1



We’re the Pensions and Lifetime Savings Association, the national association with a ninety-year history of helping pension professionals run better pension schemes. With the support of over 1,300 pension schemes and over 400 supporting businesses, we are the voice for pensions and lifetime savings in Westminster, Whitehall and Brussels.

Our purpose is simple: to help everyone to achieve a better income in retirement. We work to get more money into retirement savings, to get more value out of those savings and to build the confidence and understanding of savers.

About the research

PLSA commissioned ComRes to conduct a consumer poll of 18-35 year olds. ComRes interviewed 962 British adults aged between 18-35 online between 25th July and 9th of August 2016. Data were weighted by region to be representative of all British adults; by gender, age and socio-economic grade to be representative of all British adults aged 18-35. ComRes is a member of the British Polling Council and abides by its rules.

Lucy Grubb, Head of Media and PR, Pensions and Lifetime Savings Association
T: 020 7601 1726, M: 07713 073 023, E: [email protected]

Babak Mayamey, PR Manager, Pensions and Lifetime Savings Association
T: 020 7601 1718, M:07825 171 446, E: [email protected]

Kathryn Mortimer, Press Officer, Pensions and Lifetime Savings Association
T: 020 7601 1748, M: 07901 007 713, E: [email protected]

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