Just one in five (20%) millennials say saving to secure a desired retirement lifestyle is a top savings priority, according to a Pension and Lifetime Savings Association (PLSA) study.
This compared to just over a third (34%) of generation X respondents (those aged 35 to 54), and exactly half of those over the age of 55.
The research, which was conducted on behalf of Close Brothers Asset management by Opium, analysed the views of workers in companies with more than 200 employees between 16 and 22 August.
It found 44% of millennials - those aged 18 to 34 - said they find the savings landscape confusing and need guidance to ensure they select the best product to place their savings.
PLSA deputy director for defined contribution lifetime savings and research Nigel Peaple commented: "It's concerning that 44% of millennials find the UK's savings landscape confusing. The industry and government must do more to de-mystify savings and make it more accessible to this generation."
The survey further revealed while just 4% of 18-34 year olds have a Lifetime ISA (LISA), around a third said they are likely to open one in the future.
Of those likely to open a LISA, 69% saw it as complementary to their workplace pension, with only 18% saying they would opt out of their work place pension if they were to open a LISA.
Of the 41% that said they would either be unlikely to open a LISA, or did not know, 64% cited a lack of information as a main reason.
The survey also revealed millennial workers are saving an average of £3,445 per annum in non-retirement savings compared to generation X, who save an average of £3,073 per annum - equating to nearly £400 less per annum.
It showed savings priorities naturally change as employees progress through different life stages, with just over a third (34%) of millennials prioritising saving for short-term events such as holidays, and 13% prioritising ticket purchases.
Meanwhile, one in four said they prioritise paying off debts, and exactly one third (33%) said they would prioritise purchasing a house.
Close Brothers head of financial education Jeanette Makings said millennials are often a prime media target when looking at poor savings habits, but this research shows despite being the workplace generation that earns the least, they save the most.
She added: "They also have a great advantage when it comes to long-term saving. With expected increases in working life and when looking at the choice from pension freedoms, they are potentially looking at 50+ years of savings and 65+ years of investment performance - a timeframe no other generation can match.
"But their difficulty is in balancing the shorter term goals such as a house deposit with longer term ones such as retirement. The generation of most concern is the 35-54 year olds who, without the cushion of a defined benefit pension like the generation before them, and without the time to build up their long-term savings, like millennials, there is the increased risk of them being unprepared for retirement with all the issues that brings for them and their employer."
Phoenix Group will launch an ESG defined contribution (DC) default solution for pension fund clients of its Standard Life Assurance business and their scheme members.
Newton’s Curt Custard considers the investment outlook for 2021 and the implications for DC schemes
Master trusts’ investment strategies have grown and become more sophisticated over the last three years, but “growing pains” are hindering progress, according to the Defined Contribution Investment Forum (DCIF).
More than half of BlackRock’s flagship UK defined contribution (DC) default fund’s assets will be invested in ESG strategies by June 2021.