As younger workers rethink long-term saving priorities, Penfold calls on the industry to make pensions more relevant and visible.
Recent Penfold research found that 42% of Gen Z are on track for retirement poverty at auto-enrolment. The findings, available in their full Gen Z report, also revealed that while many younger people aspire to retire earlier and achieve greater financial freedom, retirement can feel too distant to compete with more immediate financial priorities.
This challenge has been brought into sharper focus by recent reports highlighting how younger workers are navigating financial pressures and increasingly prioritising more accessible and flexible savings options, such as cash savings and ISAs.
This reflects a growing generational tension within retirement savings with Gen Z entering adulthood amid high housing costs and economic uncertainty. While many still value long-term financial security and aspire to retire earlier than previous generations, retirement can feel too distant to compete with more immediate financial priorities.
Analysis from JPMorgan Asset Management found that Gen Z investors often prioritise ISAs over pensions because of their greater accessibility and flexibility, while research from the Society of Pension Professionals suggests retirement saving remains a lower priority than other financial objectives for many younger workers.
With Pension Awareness Week focused on improving understanding of retirement saving, Penfold believes encouraging people to save and helping them understand the value of pensions should go hand in hand.
By making pensions more visible, easier to understand and more clearly connected to people’s financial goals, more people can feel confident about building for the future.
Chris Eastwood, Co-Founder of Penfold, said: “Pension planning still asks Gen Z to prioritise a future that is decades away, while many young people are focused on paying rent, saving for a home and managing the rising cost of living.
“Many younger people already know financial security is important and aspire to achieve greater financial freedom, including earlier retirement than previous generations. Yet pensions are often presented as a sacrifice today for security tomorrow, rather than a tool for building long-term financial confidence.
“If we want younger generations to take a more active role with pensions, we need to make them simpler to understand and more clearly connected to the financial goals people are already working towards. Technology that gives people a clearer picture of what they have already saved has a strong role to play.
Eastwood adds, “The development of Pensions Dashboards for the 2027/2028 financial year is a significant opportunity. When savers can see their pension savings in one place, retirement planning becomes more tangible and easier to act on.
“Rather than focus exclusively on retirement, we can broaden the conversation to include financial freedom and confidence. People are more likely to take action when they can clearly see the value of what they are building,” concludes Eastwood.