Millennials will receive pensions that are similar to those given to today’s pensioners, a report has announced.
Analysis by the Resolution Foundation has predicted that millennials will be able to look forward to a retirement income that is on par with that offered to pensioners in 2017.
This pension high will come after a slight dip for the generation currently in their 40s, but by the time 2050 comes around pensions will have risen to around £300 a week.
The report states that the predicted pension for a man in 2020 will be £310, which will fall to £285 around 2045 and steadily climb to £300 by the time today’s millennials are signing up for a state pension.
The Resolution Foundation said the government’s auto enrolment scheme will be an important driving factor behind the recovery of the pension.
However, it isn’t all positive.
What baby boomers gain, millennials will miss out on as it is suggested that the younger generation will be unlikely to build a similar housing wealth to that of baby boomers.
It’s also important to note that this forecast is predicted under numerous assumptions, including the one that those currently in an auto enrolment scheme will remain in one – despite increased contributions from next year.
David Finch, senior economic analyst at the Resolution Foundation, said: “Rising pensioner incomes has been one of the biggest living standards success stories this century.
“And yet retirement is second only to housing in terms of causes for concern for young people’s prospects.”
He added: “But these fears are overdone.
“Millennials are on course to enjoy similar levels of retirement income to today’s pensioners, largely thanks to the success of auto-enrolment in getting them to save into a workplace pension from an early age.”
The report concludes: “Our analysis of current and future retirement income adequacy shows that neither pessimism nor complacency is warranted.”
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