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For today’s kids, a bird in the hand is worth two in the NEST.

For today’s kids, a bird in the hand is worth two in the NEST.

- Young people don’t save.  They prefer to spend their money on instant gratification rather than think about providing for their own future. -


This is one of the findings from research produced by the International Longevity Centre and Prudential[1], and many will feel that it hardly qualifies as breaking news.


The report goes on to consider what can be done about this; in particular it looks at the behaviour of today’s younger generations in order to try to find the trigger that will make them more provident.


While a lot of what is proposed is very worthy, and will have some beneficial effects, the report does not really get to grips with why this younger generation are spending so much on the present with so little thought about the future..


Paradoxically, one of the reasons may well be that the success of their parents in preparing for the future is inhibiting today’s youth from preparing from their own retirement.


In my experience, people generally forecast the future from what they know of today.  Older generations rated pensions highly because they lived in tighter knit communities and could see for themselves the number of old people struggling to get by on limited state pensions.   They were aware of the elderly skimping in order to meet their rent and not having any income after years of low-paid work.


It was the fear of ending up like this drove future provision higher up their own personal agenda and that naked fear drove them to purchase houses and provide themselves with an income in retirement.


Now, with far less community awareness, young people don’t necessarily come into much contact with the pensioner generation.  They are less likely to understand the struggles of pensioners today and so fear of the future does not act as a motivator of behaviour to any great extent.  The fact that older people are often portrayed in the media as having a good life post retirement, spending money on expensive cruises and playing golf, diminishes younger peoples’ drive to tackle the issue of personal pension provision.


What we need now is not more dry statistics but a way to make young people realise that they cannot afford the post-retirement lifestyle that they see around them; to make them feel the fear of previous generations.  A way of raising the fear factor is going to be key to making today’s young people wake up to the need to save for a rainy day.


Tom Murray

[1] Resuscitating Retirement Saving - How to help today’s young people plan for later life. Dr. Craig Berry.  June 2011.

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