Almost half (48 per cent) of 18-30-year-olds have “never heard” of defined contribution (DC) pensions, despite 66 per cent considering their long-term financial aspirations achievable, a report from MRM has revealed.

Awareness and understanding of the common pensions phrase were significantly lower than other financial terms, such as APR (35 per cent unfamiliar) and compound interest (33 per cent unfamiliar).

In addition, just over a fifth (22 per cent) of young people claimed to have a workplace pension, despite three-quarters (74 per cent) of survey respondents being employed and falling into the auto-enrolment age bracket.

The Young Money report suggested an awareness issue could stem from the channels pension schemes use to communicate with members.

It analysed a representative sample of 32 financial firms’ social media footprints, which showed that 45 per cent of 18-30-year-olds claimed to get their financial information from channels such as TikTok, Instagram, Twitter, and Reddit.

In comparison, just 33 per cent relied on direct mail from their financial services providers, and 29 per cent relied on messages in apps.

Perhaps most significantly, 59 per cent of respondents followed social media influencers, and everyone in this cohort claimed to have made a financial decision based on influencer content.

Despite this, almost half (47 per cent) of 18–30-year-olds still believed financial services providers, alongside schools and colleges, held the biggest responsibility for ensuring people received good financial guidance or education.

MRM director and head of institutional, Helena MacPherson, said the report showed that the pensions industry must pay closer attention to social media to help prevent unregulated influencers from filling the void with potentially dangerous and misleading advice.

“Whether you’re a DC pension scheme or a multinational corporation, the key to good communication is knowing what story you want to tell and who you need to tell it to. You also need a good understanding of where your audiences hang out and which channels you can use to reach them," she continued.

“If this year’s Young Money report tells us anything, the demand for reliable financial guidance has never been greater.

"And with social media the place to be, there has never been a more opportune time for trusted sources - such as pension providers and trustees - to establish a presence and help 18-30-year-olds understand how to prioritise retirement saving alongside their shorter-term financial goals.

“As we often see pensions organisations - even those with an established social presence - struggling to gain traction with customers in the same way as other financial services firms and influencers, the key question is how the industry will go about creating content that will deliver the desired impact, in a way younger people want to consume it.

"Whether it’s through gamification or influencer partnerships, I’m hanging my hopes on 2025 being the year pensions take over the social media space.”

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