Amidst heightened inflation, 16 per cent of individuals are now giving more thought to the amount of money they require for their livelihood, while 11 per cent are prompted by increasing interest rates.
Brits are paying more attention to personal budget matters as 2024 seems to be a slowly better year following two years of high inflation and rising interest rates.
According to Standard Life’s Retirement Voice survey, rising inflation is making more people think about their financial future and pay more attention to retirement funds. This is especially true for younger persons. 11 per cent and 16 per cent, respectively, of respondents blame rising interest rates and inflation for their interest.
Younger generations are thinking about their finances because of inflation (21 per cent), and interest rates (15 per cent). Starting pension contributions at age 22 with a £25,000 salary and typical auto-enrollment rates may provide a £434,000 retirement fund by age 66, according to typical Life’s analysis, which highlights the need to begin financial planning early.
The retirement fund would be significantly impacted by further delays; waiting just five years until age 27 may result in a £114,000 smaller amount of £320,000.
Standard Life managing director for workplace Gail Izat says: “It’s been a tough couple of years for people of all ages in the UK, but younger adults have seen some of the worst impacts of rapidly rising prices and interest rates as essentials are likely to form a higher percentage of their monthly spend and their living situations are often more precarious. The fact this seems to have led younger generations to consider their long-term financial planning more is perhaps one positive to take from the situation, as it’s likely to improve their outcomes in retirement.
“Employers and providers have an opportunity to help their younger employees and scheme members continue this trajectory by providing relevant and targeted communications, engaging tools and a focus on financial education and wellbeing, as well as taking a holistic approach to people’s finances – perhaps through use of open finance or helping them with other pressing financial priorities such as buying their first home. The far future can be daunting, but showing how long-term saving is part of a larger whole can help people to visualise their finances in the round and lead to better future outcomes.”