Get Britain Pension Ready, a campaign by Annuity Ready, uncovers that over a quarter of young Gen Xers admit to having no understanding “at all’ of pension terminology, while young adults (27%) claim to have “a great deal” of understanding.
· Research finds young adults aged 18-24 (27%) – members of Generation Z likely to have recently entered the workforce – claimed high-levels of understanding of pensions terminology
· Whereas, 45–54-year-olds – the younger members of Generation X who are the next generation approaching retirement – say they have no understanding “at all” (27%) of pension terminology
· 30% of young adults (aged 18-24) turned to social media for advice while respondents aged 65 and over (27%) said they did not ask anyone for advice
· Across all age groups, 41% believe their parents had an easier experience with pensions and retirement planning than they do
New research released by the Get Britain Pension Ready campaign, reveals that young adults aged 18-24 claimed the highest levels of understanding of pensions terminology, despite being the most likely to have only just entered the workforce.
While being decades away from retirement, 27% of people aged 18-24 – those belonging to Generation Z – reported having “a great deal” of understanding of pension terminology. The highest percentage among all surveyed.
Most concerningly, the survey commissioned by Annuity Ready on behalf of the Get Britain Pension Ready campaign, shows a worrying lack of understanding in those aged 45-54 years olds – the younger members of Generation X.
This group are likely still in employment and said they had no understanding “at all” (27%) of pension terminology, despite being next in line to retire.
Interestingly, the high-levels of understanding indicated by those aged 18-24, appears to be misplaced when tested against actual knowledge of pension products.
A striking 39% of young adults aged 18-24 believe they are currently enrolled in or receiving payments from a final salary pension scheme – a product that was largely phased out before this generation entered the workforce.
When it comes to specific pension terminology, those aged 65 and over show the most familiarity with pension products as 35% said they know exactly what annuities are, the highest rate among all generations and well above the national average of 25%.
Behind them, those aged 55 to 64 years old (27%) also indicate notable degrees of knowledge about annuities. With this group being made up of the older half of Generation X and young Baby Boomers likely still in employment, this may suggest the cohort’s proximity to retirement has likely driven familiarity with specific pension products.
But surprisingly, those aged 18 to 24 (27%) are just as likely to say they have heard of and know exactly what an annuity is, despite being the generation furthest away from retirement.
Meanwhile, those aged 45 to 54 (15%) – made up of younger Generation X – and those aged 35 to 44 (16%) – made up of older Millennials, the cohort in their peak earning years but likely still caught between career pressures and family-building financial responsibilities – show the lowest levels of understanding of annuities.
When it comes to who respondents say they are most likely to ask for advice about pensions and retirement planning, 30% of 18 to 24 year olds say they would turn to social media, nearly four times the national average of 8%. This reliance on social media for complex pension education may help explain both their self-reported confidence in understanding and the misconceptions they appear to have around certain pension products.
In contrast, respondents aged 65 and over demonstrate a self-reliant approach to pension planning as 27% said they do not ask anyone for advice, significantly above the average of 13%.
Across all age groups, 41% believe their parents had an easier experience with pensions and retirement planning than they do, with 52% of those aged 18-24 stating their parents’ generation had it easier.
Sarah Lloyd, Commercial Director at Annuity Ready, says:
“Our previous Get Britain Pension Ready research at the start of the year uncovered significant misunderstanding and confusion across generations, particularly among Gen Z and Gen X, so with this research we wanted to delve deeper into these knowledge gaps. Education is such a fundamental part of pension preparedness, and the earlier we can help people get the information they need to start planning for retirement, the better.
The misconceptions we’re seeing – like 39% of young adults believing they’re enrolled in final salary pensions that were largely phased out before they entered the workforce – highlight just how important accessible, accurate information is. Annuity Ready remains committed to providing access to the resources people need and we invite everyone to take our Retirement Readiness Quiz, to get a sense of where they are in their journey and get directed towards additional resources that can help fill in any gaps.”
Dr Eliza Filby, independent generational expert for Annuity Ready, says:
“What we’re seeing here reflects broader societal shifts that have particularly impacted Generation X, the so-called ‘squeezed generation’ who find themselves caught between caring for aging parents and supporting their own children well into adulthood, often while facing their own financial pressures.
“This cohort entered the workforce during a period of significant pension reform, witnessing the decline of final salary schemes and the shift toward more complex, individual responsibility for retirement planning.
“Unlike previous generations who could rely on more straightforward pension pathways, Gen X has had to navigate an increasingly fragmented landscape without the digital nativity of Gen Z or the established pension certainty of baby boomers and in the context of rising divorce which also tends to impact retirement pots. We know that this generation expects to work longer but that doesn’t negate the need for retirement planning.
“The fact that 27% of 45 to 54 year olds admit to having no understanding ‘at all’ of pension terminology despite being closest to retirement, reveals the profound impact these systemic changes have had. While Gen Z’s over-confidence in their understanding may be concerning, Gen X’s knowledge gaps represent a more immediate crisis, as this generation approaches retirement with limited time to plan for their future beyond work.”
Everyone can get pension ready by using free educational resources available at getpensionready.com, to better understand their options and make informed decisions about their financial future. This includes a Retirement Readiness Quiz, which uses a simple scoring system to help Brits discover any gaps in their retirement planning knowledge and points them towards helpful resources based on their score.
