Almost a fifth of 18-24 year olds are put off starting a pension purely because they don't like the word, new YouGov research commissioned by AXA has found.
If that number - almost a million 18-24 year olds - continue to delay starting their pension provision by just 5 years, they are potentially looking at a combined shortfall in their retirement income of £44.1bn, (£44,362.30 per person), making 'pension' one of the most costly words in the history of the English language. In total almost one in five UK adults - over 10 million people - are being put off by the word pension.
It's clear that we need to get younger people thinking about their future financial stability much earlier. Trying to find a more compelling word or phrase is one simple thing we can do.
Just 4% of the UK population like the word pension, whilst - almost one in five (18%) associate it with ‘grey’ and almost one in ten believe the word is too old fashioned. Worryingly almost three-quarters of 18-24 year olds (72%) associate the word with old age. Such perceptions could mean that the younger generation are leaving things too late.
To combat such pension inertia, AXA has kicked off a search for an alternative word or phrase. As part of its My Budget Day campaign, AXA is working with Collins English Dictionary to ask the public to suggest a new name.
The word ‘pension’ is part of the fabric of British life, but clearly some younger people are finding it off-putting. I'm not sure why - perhaps they associate it with a period of life that is just too far off for them to think about.
Perhaps it's the association with ‘pensioner’, meaning ‘an elderly person’. Or perhaps the recent and widely-reported closing of final-salary pension schemes to new joiners is part of the picture. Whatever the reason, the word ‘pension’ does not seem to be encouraging people to save for the future, and a new name might give ‘pensions’ a new image.
Pensions Facts
- The first organised pension scheme was for Royal Navy Officers in the 1670s.
- 1 January 1909 was Pensions Day - the day the first state pension was introduced. Means-tested, it was between 10 pence and 25 pence. It was introduced during the Liberal government of David Lloyd-George. Sir William Beveridge, father of the welfare state, was an adviser.
- In 1925, the pension was 50 pence a week from 65. Today, it's £95.25.
- The Pensions Act of 1995, which is concerned with the security of pension fund assets, was set up in response to the Robert Maxwell scandal.
- In 2002, a British pensioner living in South Africa failed in her legal challenge against the UK government to have her pension up-rated with inflation. The ruling affects thousands of British ex-pat pensioners around the world.
- The last American Civil War Widow's pension ceased paying out in 2004 (the American Civil War ended in 1865). Alberta Martin, reportedly the last widow of a Civil War veteran, died in May 2004 in Enterprise, Alabama. She was 97. At the age of 18, she married Civil War veteran William Jasper Martin, 81, who received a $50-a-month Confederate veteran's pension.