Gen Z and millennials expect to retire at 59 with an annual income of nearly £26,000 – but just 21% are actively saving for their retirement

A study of 2,000 adults aged 20-40 found 61 per cent expect to have the same – or better – standard of living as their parents when they retire.

But while 52 per cent have set financial goals to keep them focused on saving for the future, just 22 per cent are on track to meet their target.

Instead, a third (33 per cent) are focused on saving for a house deposit while 28 per cent are building a cash buffer for unexpected expenses.

Others are putting their spare cash towards a wedding (12 per cent), starting a family (17 per cent) or a one-off event such as a holiday or new car (24 per cent).

Concerned for retirement

The study, by saving and investing app Moneybox, also found 87 per cent are concerned about saving for their retirement but 49 per cent feel they can’t afford to at the moment.

As a result, only 35 per cent are contributing to a workplace pension, with just 11 per cent maxing out their payments.

While 12 per cent have chosen to invest in ‘higher risk’ trading options such as crypto.

Ben Stanway, co-founder of Moneybox, said: “It is clear from our research that many young adults are beginning to realise how much they will need to save to be able to enjoy a comfortable retirement.

“The challenge they face is significant, especially when you consider changing external factors such as the rising state pension age and the fact that many are currently using most of their income to fund their day to day lives and to save for shorter-term goals, such as buying a house, getting married or starting a family.

"For many, there is little left to go towards something like their retirement.

“While at times it can be difficult to see past our more immediate financial needs and goals, we hope to help everyone get on the right track towards securing a retirement they can look forward to.

"To do this, we need to change the perception that retirement is something you only need to think about in mid-life, to being something you actively plan for alongside your short, mid, and long term financial goals.”

Annual income

The study found more than half (52 per cent) of those polled have considered the annual income they would like to have when they retire.

Of those, 42 per cent have done so as they are concerned about their standard of living in retirement, while 40 per cent want to be able to retire comfortably as soon as they are able to.