The recent economic climate of high inflation and rising interest rates has led more people, particularly younger adults, to begin thinking about their retirement finances, according to Standard Life.

Its research found that 16 per cent of people had taken more of an interest in how much money they’ll need to live on in retirement due to rising inflation, while 11 per cent said increasing interest rates had encouraged them to think about their retirement finances.

These figures rose to 21 per cent and 15 per cent respectively amongst younger generations.

Standard Life described this as promising, as its analysis found that those who begin working on a salary of £25,000 a year and pay auto-enrolment contributions from the age of 22 could have a retirement fund of £434,000 by age 66, not adjusted for inflation.

However, waiting for five years to start contributing to a pension pot at age 27 could result in a retirement fund of £320,000 by age 66, £141,000 less than those contributing from age 22.

“It’s been a tough couple of years for people of all ages in the UK, but younger adults have seen some of the worst impacts of rapidly rising prices and interest rates as essentials are likely to form a higher percentage of their monthly spend and their living situations are often more precarious,” commented Standard Life managing director for workplace, Gail Izat.

“The fact this seems to have led younger generations to consider their long-term financial planning more is perhaps one positive to take from the situation, as it’s likely to improve their outcomes in retirement."

Izat argued that employers and providers have an opportunity to support younger employees and scheme members continue this trajectory of an increased interest in retirement finances by providing relevant and targeted communications, engaging tools, and a focus on financial education and wellbeing, as well as taking a holistic approach to people’s finances – “perhaps through use of open finance or helping them with other pressing financial priorities such as buying their first home”.

“The far future can be daunting, but showing how long-term saving is part of a larger whole can help people to visualise their finances in the round and lead to better future outcomes,” she concluded.

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