Some 10 years ago, an old boss of mine gave me a useful guide to saving and spending. He said that in my 20s and early-30s I would spend and get into debt; I would then use my late-30s and early-40s repaying that debt and only in my late-40s would I start to be serious about saving. In my 50s, he said, I would start to create wealth, once my children had moved away from home.
That conversation has stayed with me ever since and I believe we need a savings culture that prepares our young people for the future.
I was, therefore, interested to read that UK pension savings are at their highest levels for 17 years. This boost has largely been driven by a huge increase in the number of people in their 20s saving for retirement through the introduction of auto-enrolment in 2012.
According to the Office for National Statistics, 50 per cent of employees contributed to their company pension in 2013. This increased to 59 per cent in 2014. There was a particularly big leap for people aged 22 to 29, with 53 per cent saving into a workplace pension in 2014, compared to only 36 per cent the year previous. The roll out of auto-enrolment schemes to all employers by 2018 will see minimum contributions hit 8 per cent, of which at least 3 per cent must come from the employer.
These statistics provide an encouraging insight into a much-needed changing pattern of UK savings, particularly for the younger generation.
Indeed, previous research from NOW: Pensions showed a worrying trend when reviewing the savings culture in Britain, with more than one in four people stopping saving in light of the recession and not picking up again.
The figures showed that 32 per cent of people had less than £500 in savings and as many as 15 per cent had no savings at all. Back in 2012, OECD data showed the UK had one of the lowest savings ratios among the leading developed nations.
According to the NOW: Pensions research, the economic climate posed a major barrier to saving: one in four blamed frozen wages and rising bills, while one in ten believed there to be no point in a time of low interest rates.
Recent research from the Financial Times found that people over the age of 65 are now richer than 60 per cent of the population. Meanwhile, younger people have seen their incomes fall dramatically. So it seems the younger generation needs continued support.
With better financial education now slowly being introduced into schools through revisions of the core curriculum, young people should finally be given the much-needed knowledge and understanding to want to save. The new changes to workplace pensions will play a big part in helping younger generations have a more financially secure retirement.
Lisa Winnard is HR director at Sesame Bankhall Group