Fewer people in their 40s are actively thinking about their retirement planning versus those in their 30s (69 percent vs. 76 percent). Both groups unsure of where retirement income will stem from, yet 30 somethings are more proactive and save more into workplace pensions while 40 somethings seem struck by greater inertia.

Workers in their 30s have higher workplace pension participation and, once they start saving, are more engaged with their retirement monies than those in their 40s, new research from Fidelity Worldwide Investment reveals.¹  Despite being further from retirement, 30 somethings appear to put a higher emphasis on their retirement planning with three in four (76 percent) actively thinking about retirement, dropping to 69 percent for those in their 40s.

Among those holding any sort of pension product, participation is higher for workers in their 30s than those in their 40s with only 8 percent of those in their 30s not currently contributing anything into a pension versus 18 percent for those in their 40s. Furthermore, as many as 81 percent of younger workers contribute to a workplace pension compared to 72 percent of 40 somethings.  

 Both groups are unsure from where the majority of their retirement income will stem, with 24 percent of 30 somethings and 25 percent of 40 somethings saying they simply don’t know. However, those in their 30s appear to view this as an impetus to save and engage while older workers seem to experience more inertia.

While 72 percent of pension holders in their 40s personally contribute up to 5 percent or more of their monthly salary to their pension, 83 percent of younger workers do so. In addition, nearly a quarter (22 percent) of older workers register lower engagement and are not able to say how much they make in pension contributions each month, suggesting they have no clear view on how much they have accumulated. This compares to just 12 percent for those in their 30s.

Richard Parkin, Head of Retirement at Fidelity Worldwide Investment said: “You would normally think that people who are closer to retirement would automatically be more engaged with the issues however, our research has shown this is not the case.”

“There are a variety of reasons why – people in their 40s may be facing greater financial and family commitments that divert their attention and it would be unfair to ignore the very real costs and demands that people face.”

“Our research does however show a great success for what the auto-enrolment policy was aiming to achieve, namely an increase in participation in workplace pension saving. With people so unsure in both age groups about where they are going to get their retirement income, it’s clear that harnessing inertia from “do nothing, get nothing” to “do nothing, get something” has had a genuine impact with only 6 percent in each group saying they contribute nothing to a workplace pension.”

“It is unfair to lecture people by simply saying “save more” however, research has shown that consistency of contributions is key to good retirement outcomes as opposed to more.”