A new study has laid bare the ambitious retirement dreams of Generation Z, painting a picture of a future filled with global travel, holiday homes, and creative pursuits. However, the research also highlights a significant gap between these aspirations and the financial planning required to achieve them.
Dreams of Golden Years: Travel, Hobbies and Side Hustles
The poll of 2,000 working adults, commissioned by Skipton Building Society and conducted by OnePoll, found that 27% of Gen Z would rather invest their pension savings in experiences than in material goods. A significant portion, 16%, aspire to move abroad in their later years.
Their vision for retirement is notably active and adventurous. Many picture their golden years packed with cruises (22%), while others plan to take up entirely new hobbies like pottery (a third of respondents). Notably, 22% hope to turn that newfound passion into an extra income stream. Writing a memoir also features on the bucket list for the youngest generation in the workforce.
The Funding Gap: Ambition vs. Financial Reality
Despite these vivid plans, the survey uncovered a worrying lack of engagement with the practicalities of funding such a lifestyle. 33% of Gen Z admitted they have no idea how much they contribute to their pension pot each month. Furthermore, a third simply believe they won't need as much money as they age.
In terms of funding their future, over half (over 50%) intend to rely on their savings, while 35% expect to cash in investments and shares. A pragmatic 21% anticipate needing a small side hustle to afford everything they want to do.
Seeking Advice: From Parents to AI
When looking for guidance on retirement planning, 26% of Gen Z have turned to their parents for conversations. Intriguingly, reflecting the digital age, 15% have used AI tools like ChatGPT to learn more about their financial future.
Helen McGinty, Head of Financial Advice Distribution at Skipton Building Society, issued a stark warning: "Right now, too many are walking blindly into the future. Gen Z need to wake up to the reality that those dreams won't happen without planned and considered action."
She emphasised the power of early planning: "The earlier you start, the more options and flexibility you'll have later on. Small steps taken today can make a huge difference to how comfortably, and confidently, you're able to live in the future."
McGinty added, "Without a clear picture, it's easy to underestimate how much you'll actually need to fund the lifestyle you're imagining. Getting to grips with your options early allows you to make informed choices."
The study also revealed that Gen Z expects to retire at 60 – the earliest anticipated retirement age of all generations surveyed. Overall, a quarter of all respondents expect to spend more of their pension early in retirement.
