Retirement
is too far off and I prefer to enjoy my money now. Sound like what you would
expect to hear from a twenty something today? Well it’s not far off! In a
recent survey commissioned by ITC, retirement being too far off was found to be
the main factor for the reluctance to invest in a pension amongst Generation Y.
Described
as the ‘here and now’ generation, it seems that Generation Y view retirement
planning as somewhat of an afterthought. In a time when staying with your
current employer for longer than three years seems like a lifetime, joining a
company pension plan is probably not a top priority for most. But how
sustainable is this and what does it mean for the future of this generation? Do
they hope to rely on the state pension, currently valued at €12,000 per annum or have they even
thought about it? Growing up in an era of prosperity yet arriving at a
destination of economic turmoil, are many simply avoiding their financial
responsibilities?
Is
the issue the challenge of engagement or has the industry simply not tried?
Generation Y are seen as the hardest generation to reach, not surprising given
the media rich environment that they have grown up in. As an industry, is it our duty to highlight the issue in a
way that will force this young population to stand up and pay attention? By
2025 Generation Y will make up 75% of the world’s workforce. This is a scary statistic
when you fast forward to retirement time.
Are the consequences of enjoying money now to be realised
too late for Generation Y? Not if we adapt our strategies to suit their needs. An
on the go generation that demand convenience and accessibility, a pension
plan to suit Generations Y’s lifestyle is lacking within the marketplace. But what would the ideal pension product for this demographic look like? It must start with ease of access, the option of early drawdown and bundled solutions that will allow for planning opportunities. We are in need of a product that will
work in harmony with the lifestyle choices of the individual.
The dramatic change in how consumers of this
generation engage with products demands that we adapt our strategies in order
to stay relevant. The product has to be right but indeed so does the message. Pensions
need to be marketed in a way that is relatable; relating the cost back to real
life terms and demonstrating the consequences of not making retirement
provisions.
There is an exciting opportunity here if it is
executed in the right way.
Melanie Farrell
Independent Trustee Company
