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‘I’m not saving into a pension – I don’t trust them’

Anya Kuvarzina, a millennial who has chosen not to save into a pension
'I don't want to tie my money down in a pension, I need to be independent,' says 35-year-old Anya Kuvarzina - Dale Cherry

What’s the point of locking your money away for the future when you could be spending it now? So goes the logic for many millennials, fewer of whom are saving for their retirement. That’s the case for Jenny Woolf* who has £7,000 in the bank and just £250 in a pension pot from a brief teaching stint.

She sees herself as being “very much in the ‘doom spending’ category” – those who consider their savings so far from being able to fund something meaningful that they simply don’t bother putting money aside at all. Instead, they just buy more stuff.

Signs of doom spending can be seen across social media, in posts celebrating vintage Chanel handbags, for instance, or exotic holidays – things regarded as “little luxuries” procured in spite of, or perhaps to distract themselves from, the state of their finances.


Half of what Woolf, 33, has in her bank account will go on her upcoming wedding, and locking money away in a pension “doesn’t feel worth it,” she says. “I feel almost quite freed by it. I’m so far away from buying a house that I just go ‘yeah, let’s spend’,” she explains of her mentality. “That doesn’t mean eating out 20 times every week, but I may as well enjoy the life that I have now.”

Woolf is by far not the only millennial for whom pension planning has become last on the priority list – or fallen off it completely. A recent report from InvestEngine, an investment firm, found that just 11pc of 18- to 34-year-olds are saving for retirement, with 61pc saying they are more focused on their immediate financial challenges instead (14pc said they were relying on their inheritance for any future wealth).

‘Who knows what age we’ll be able to retire’

Anya Kuvarzina, a millennial who has chosen not to save into a pension
Ms Kuvarzina prefers to invest in cryptocurrency rather than a pension - Dale Cherry

Some fear that the retirement age will keep rising so high they won’t actually be able to unlock their pot; the International Longevity Centre UK has predicted that state pension age will hit 70 come 2040. Others believe the financial system will have imploded by the time they’re due their payout.

That includes 35-year-old Anya Kuvarzina, who says that while she has always been told pensions are a good idea, “I didn’t trust it, for some reason. I didn’t want to get in any long-term agreement with anything to do with the Government.”

With the sharp decline of companies offering gold-plated pensions, and the whittling away of many previously generous schemes, the landscape has changed radically for this generation.

Self-employment has risen across the board (up by 25pc since 2000), while the explosion of startups has led to employees clamouring for perks like profit share or offices with kombucha-filled fridges in lieu of real benefits.

Those who are employed get auto-enrolled, where employers and workers pay in to workers’ pensions – although it is possible to opt out. However, those who remain opted in fear being left with a smattering of small pension pots they lose track of (a Gallup report dubbed millennials the “job-hopping generation” because they are three times more likely to have switched roles in the past year compared to Generation X workers and baby boomers).

As a result, future-proofing looks different for today’s young people, explains Marcus Bullus of Oxhouse Square, a wealth management company. That doesn’t mean they’re less clued up; the rise in access to information online means younger people “want to be involved in the process, compared to an older generation of investors that were happy paying into a pension whilst not really knowing who was looking after it or where it was invested.”


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‘I like throwing money in crypto and seeing it grow’

Bullus notes that years of storing cash in low-interest rate savings accounts has given young investors little, and now they’re pursuing avenues that promise bigger returns. That prompted Kuvarzina to begin investing in cryptocurrency five years ago. Although she knew nothing about deregulated cash, seeing the option to invest on her banking app gave her confidence that it was worth a go.

“I would just throw some money into Bitcoin and see it grow; it was very exciting,” she says of the early days, when she’d put in a spare £50 or £100. “Everyone was doing it, so I also wanted to be in on trend.”

Now, half a decade later and running Art Lab, an illustration agency, those investments sums have risen to £500 or £1,000 a time, with Kuvarzina typically withdrawing the money within a matter of hours of accruing a small profit. Kuvarzina says her partner, with whom she has a four-year-old daughter, takes a longer-term approach to his crypto investing, but she has no intention of tying her money down long term, and less still in a pension. Her reluctance comes from “a need to be independent and to rely on my own resources,” she says.

Only a lack of disposable income holds Kuvarzina back from investing more – but she does not keep tabs on how much this method has netted her, nor does she expect to make anything big in the short term.

“I always think about how I can earn more money and I never about how I should save more,” she says. She is happy to invest in taking further courses in education or business. “I make bigger goals, and it’s been working out so far.”

Millennials are the biggest cryptocurrency investors, with figures showing that a 29-year-old is twice as likely to own virtual cash than those aged over 45. But buyers must beware that it “has no intrinsic value and is not protected by the Financial Conduct Authority,” Bullus says.

“If someone loses access or has their crypto stolen, there is very little they are able to do about it currently, and I have spoken to clients who this has happened to and it has caused them a great deal of upset.”

‘I don’t trust what could happen to the economy’

Liz Oughton, from Willenhall, West Midlands, a millennial not saving into a pension
36-year-old Liz Oughton says seeing people not getting their expected payouts or not retiring at the age they thought they would has put her off pensions - Jay Williams

Bullus is more optimistic about the safety nets afforded by pensions or Isas, and also points to property – “a proven asset throughout the years” – for its nest egg potential. Naturally, affording it is the main roadblock for millennials; figures from the Office for National Statistics last year showed that the average home in the capital costs 14 times the typical household income.

But it remains an investment goal for many, including Nina Francis-Young who, having recently set up her own family law coaching business, is eschewing saving for a pension in order to purchase a buy-to-let holiday home.

“Not only will this enable me to take my children away on holiday,” the 39-year-old says, “but when I come to retirement this will see me through.”

She had originally wanted to buy in Norfolk but the property was too pricey so she instead purchased a home in North Wales. She does not expect to make money from renting it out, “but to cover its costs and pay off the mortgage so at retirement I have a lump sum”.

Liz Oughton is also investing in property: the one she currently lives in. A self-employed musician and teacher, she opened Bostin’ Bakery in Willenhall, West Midlands, during the pandemic and is using her combined earnings to overpay on her mortgage by around £6,000 per year instead of putting the money into a pension.

The 36-year-old says that knowing the funds are being used for something she is already benefiting from feels safer.

“I get a bit nervous about putting my money somewhere that I can’t access before a certain age because there’s so many things that could happen… I don’t trust what could happen to the economy over the next 40 years.”

She adds: “[I] know private pensions are possibly more secure than most [investments], but it’s been such a turbulent few years in terms of people not getting payouts that they thought they would, or not retiring at the age they thought they would.”

Oughton sees her music teaching as a viable career “until I’m 80, if necessary,” so owning her home outright within the coming decades feels to her the best investment. She hopes to build her business “to a point where I do have some financial security” and can make investments outside of just her home to make her future more secure.

She admits she has spent little time investigating pensions, an attitude she believes is generational: her parents worry about her lack of long-term savings, she adds, but “they’re Boomers, aren’t they, so they’re very sorted”.

*Name has been changed