The Financial Lives survey published today by the FCA reveals that 70% of 18‑24 year olds have no private pension scheme.
A quarter (25%) of this age group have a DC scheme, although overall DC pot sizes are currently very small. Three in five (60%) 18‑24 year olds with a DC pension say they have less than £5,000 in their pot while 31% do not know.
Commenting on the findings Adrian Boulding, Director of Policy at NOW: Pensions said: “Auto enrolment is letting young people down and the FCA study should act as a wake-up call.
“It’s never too young to start saving for your future but at the moment, employees aren’t auto enrolled into a workplace pension until they are 22.
“If the age was lowered to 18, around 1.5 million 18 -21 year olds would qualify. Lowering it to 16 would have less of an impact as just 10% (100,000) 16 and 17 year olds would earn enough to be auto enrolled.”
Data from the Office for National Statistics shows that around 45% of 18-21 (1.1 million) people year olds have annual earnings over £10,000 which means that would qualify to be auto enrolled under the current rules.
Around 55% of 18 to 21 year olds have weekly earnings over £192 auto enrolment threshold. This is a higher number than the annual earnings, as many young people are likely to be students that work for only part of a year.