Click below to download "The Millennial Mosaic" PDF.
Tim Bresnan Interview
The Millennial experience of pensions and long term saving
We spoke to Tim Bresnan, Vice-Captain of Yorkshire County Cricket Club and two-time Ashes winning all-rounder about his pension experience.
Tim started his first pension significantly earlier than the average millennial. He was just 15 years old when he signed his first professional cricketing contract and was then lucky enough to be enrolled automatically into a pension scheme with the Professional Cricketers’ Association from the age of 16.
What triggered your interest in your pension?
"When you are that young you’re not really thinking about retirement; it’s just something that’s rumbling along in the background. I recently started to think about my future and my family’s future. As a professional cricketer I’ll be very lucky to play until I’m 40; an injury could end my career and change my circumstances completely. Although I’ll probably find another job after I retire from cricket, the uncertainty is still unnerving. So about 4 years ago, with the help of a financial adviser, I checked how my pension savings were doing – I was really surprised at how much I had saved. This really got me interested in my pension and planning for my retirement. Previously I’d not been thinking about it."
"I became curious about how long I would need to save to reach my desired savings goal. I set a target of £1m. So using a pension calculator I found online, I established that if I saved £200 a month, with interest at 6%, I would need to be saving for 43 years! And given that it’s currently difficult to find a saving or investment that could offer a 6% return, a 4% return would mean that I wouldn’t retire until I was 104 if I wanted to reach my target. I was shocked."
"To add to this, I also established that it is more than 30 years before I would receive my state pension, if it still exists by then. I’ve not factored the state pension into my retirement planning as I think it will be just beer tokens by the time I retire."
"Saving for the future is now incredibly important to me. After properly reviewing my pension savings it became clear to me that saving into a pension was the most efficient way of saving due to the additional tax relief available from the Government. Quite simply, it’s free money from the tax man. Who’s going to argue with that? If I could, I would top up my pension to the maximum each year. If you can afford it, do it."
What would incentivise you to pay more into your pension?
"I’d like to have more say in when and how I get my pension. For me flexibility is key."
What do you think the barriers are to saving into a pension?
"People may have other financial pressures and the government may keep on updating the rules and regulations around pension savings; but in comparison to other savings options it’s by far the simplest way to gain the highest returns."
Other saving products, such as ISAs, also have their limitations.
"ISAs can be relatively restrictive when it comes to how much you can save each year. But with a pension you contribute X, your employer contributes Y and the government gives you tax relief for doing so. It was a no brainer for me."
What advice would you give to other millennials when it comes to pension savings?
"The best advice I can give to other millennials regardless of their age or career, is the younger you start saving into your pension the better."
To read the rest of Tim's interview and more, download our report here.