People born in the 1980s are now more likely to be members of a pension scheme than those born a decade earlier, according to the Institute for Fiscal Studies (IFS).
Thanks to auto-enrolment (AE), just over two-thirds of early 1980s babies are in a workplace pension, compared to just under 55% of those born in the 1970s at the same age.
The Economic Circumstances of Different Generations: The Latest Picture, published on 30 September, evidences the success of AE with a sharp uptick of scheme membership since the policy's introduction.Prior to AE, only 40% of people in their late 20s, who were born in the 1980s, were saving into a pension scheme, compared to 55% of the 1970s group at the same age.
The gradual increase in AE contribution rates, which will hit 8% in April 2019, will also enable "younger cohorts to accumulate pension wealth faster in future than over the past few years", the IFS' report added.
However, the report noted the stark contrast between defined benefit (DB) scheme memberships of the two age groups.
Less than 10% of private sector employees born in the early 1980s, who were in their early 30s, were active members of a DB scheme. This is less than half the proportion of those born in the 1980s, when they were the same age, which stood at 40%.
This difference also amplifies the gap in contribution rates. Nine out of 10 people in DB schemes last year received an employer contribution equivalent to at least 10% of their wages, while for defined contribution (DC) the figure was just 13%.
The figures echo data released last week by the Office for National Statistics (ONS), which showed average DB contributions were 21%, compared to just 4% for DC schemes.
Overall, the report added people born in the 1980s had just over half the wealth those born in the decade before had at the same age, at £27,000 and £53,000 respectively.
Research economist and report author Andrew Hood said low interest rates would make it harder for younger savers to build up retirement funds.
"By the time they hit their early 30s, those born in the early 1980s had about half as much wealth as those born in the 1970s did at the same age," he said. "Sharp falls in homeownership rates and in access to generous company pension schemes, alongside historically low interest rates, will make it much harder for today's young adults to build up wealth in future than it was for previous generations."
However, the IFS pointed to the higher relative wealth and homeownership of prior generations as an indicator younger generations are more likely to inherit greater assets. This could provide an alternative source of retirement income.
The report said: "One consequence of the high homeownership rates of those born between 1930 and 1960, in combination with the long-term increase in house prices, is that younger cohorts are more likely to expect to inherit than their predecessors, and expect to inherit more on average."
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