date: 29 March 2006

embargo: Saturday 01 April

Save now or 'retirement reality will bite hard' TUC warns young people

Most people in their late teens and early twenties are not saving into a pension and at its annual Young Members' Conference today (Saturday), the TUC is warning that young workers face a poor retirement if they do not start saving soon. The TUC is also launching a pensions advice leaflet to help young people understand their pensions choices.

Only just over a quarter of working men (26 per cent) and a third of working women (33 per cent) between 18 - 24 have a pension. Nine out of ten of the minority of young workers are saving into an occupational pension scheme, the kind of pension most likely to provide a decent retirement income.

The new TUC leaflet explains the different kind of pensions available and says that to afford a decent retirement most people need to be paying at least 11 per cent of their earnings into a pension if they start saving at 25 but this rises to 14 per cent if they put off saving until they are 30 and 18 per cent if they delay until they are 35. Most young people are not saving sufficient amounts although FSA research shows that four out of ten 18 - 24 year olds in or seeking work think that they will enjoy a better standard of life in retirement than they have now.

The TUC is urging the government to help young people save by implementing a National Pension Saving Scheme recommended by the Turner Commission. The government is currently considering whether to propose such a scheme, which would require all employers to pay into staff pensions, alongside staff contributions, unless employees choose to opt out.

Speaking at the TUC's Young Members' Conference in Eastbourne later today, TUC Deputy General Secretary Frances O'Grady will say:

'Young people struggling with debts and housing costs are faced with tough choices. And many are putting off saving or think they will be able to get by without their own pension. But if pensions saving is left too long, reality will bite hard for young people when they hit retirement.

'The simplest way to increase saving amongst young people so that they will enjoy a decent retirement is to ensure they have access to a decent work pension with some compulsory employer and employee contribution, as Turner has recommended. But the government will need to be bold and brave, and stand up to the employer onslaught against even the modest level of compulsion that is being proposed.'

Notes to editors

- The TUC leaflet is available on www.tuc.org.uk/extras/yppensions.pdf and from the know your rights line 0870 600 4 882. Lines are open every day from 9am-9pm. A pdf is available by email from the TUC press office.

- The TUC Young Members' Conference takes place from Friday 31 March - Sunday 2 April), Eastbourne Centre, the Grand Parade. Frances O'Grady speaks at 11.30am on 1 April.

- The latest official figures (ONS, 2004) show that 26 per cent of working men and 33 per cent of working women between 18 - 24 have a pension.

- FSA research found that just under a fifth of people (19 per cent) aged 18 or over who are either working or seeking work expect to have a higher standard of living in retirement than now with one quarter (25 per cent) thinking they will be worse off, more than half (52 per cent) thinking it will be the same. Younger people are more likely to think they will have improved standards of living in retirement than older people who have not yet retired with more than 4 in ten (41per cent) 18-24 year olds and a quarter (25 per cent) of 25-34 year olds thinking things will improve (FSA, 2002).

Contacts:

Media enquiries: Ben Hurley T: 020 7467 1248; M: 07881 622416 ; E: bhurley@tuc.org.uk

Press release (700 words) issued 1 Apr 2006