Most Millennials have an unrealistic view of their retirement prospects according to a new report from HSBC.

The latest report in The Future of Retirement series, Shifting sands, finds that on average Millennials expect to retire younger than other working age generations. Millennials expect to retire at 59, two years younger than the working age average of 61.

The survey of over 18,000 people in 16 countries finds that only 10% of Millennials expect to continue working after 65 – even as their generation faces unprecedented financial pressures and state retirement ages continue to rise around the world.

This is despite 59% of Millennials agreeing they will live much longer and will need to support themselves for longer than previous generations.

A perfect storm

Millennials are seen as having the worst retirement prospects of any generation. Ten percent of people around the world think Millennials are in the best position to have a comfortable retirement, while 42% see Baby Boomers as best placed.

Fifty-three percent of people believe Millennials have experienced weaker economic growth than previous generations, while 58% agree that Millennials are paying for the economic consequences of older generations, such as the global financial crisis and rising national debt.

Nonetheless, 54% of people believe Millennials don’t know how good they have it, enjoying a better quality of life than any previous generation. Sixty percent also believe Millennials will have more flexibility in retirement, with more options to semi-retire and continue to do some work to support themselves.

Meeting the challenge

Despite the apparent ‘reality gap’ in Millennials’ retirement expectations, most (68%) have started saving for retirement, at an average age of 26.

Millennials are also more likely than other generations to take investment risks to boost their retirement saving, with 39% being very willing to make risky investments to ensure their financial stability, compared to 33% of Generation X and 22% of Baby Boomers.

Sixty-five percent of Millennials are prepared to cut back on their expenses in order to save (Generation X 59%, Baby Boomers 54%), while 61% actively seek information to guide their financial decisions (Generation X 56%, Baby Boomers 50%). One in two (51%) actively moves their money around to get the best return/deal (Generation X 45%, Baby Boomers 39%).

Charlie Nunn, Group Head of Wealth Management comments: “While Millennials are broadly aware of the economic and demographic challenges they face, they do not appear to have grasped the full implications for their retirement. With low interest rates, rising healthcare costs and potentially less state support for retired people in the future, it has never been more important to save for a comfortable retirement. Starting to save early – and saving enough – can reduce the need to have to continue working in later life.


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