More than half (55 per cent) of savers over 25 believe government support for older generations will decrease by the time today’s younger generations reach retirement age, research from the International Longevity Centre UK (ILC) and M&G plc has revealed.

The survey found that few people, believe that wealth in the UK is fairly distributed, raising concerns about intergenerational fairness and the future of the intergenerational contract.

This was particularly true amongst younger savers, with more than half (58 per cent) of those aged 18 to 24 and 53 per cent of those aged 25 to 49 feeling that older generations receive a disproportionate share of wealth.

ILC's analysis also indicated that older generations have indeed disproportionately benefited from wealth increases in the past decades, revealing that, from 2010/11 to 2019/20, people aged 55 to 64 saw their wealth increase by 39 per cent, and those aged 65 to 74 experienced a 58 per cent rise.

This stood in "stark contrast" with younger generations aged 35 to 44, who saw their wealth grow by 4 per cent.

Despite this, there was consensus amongst both the younger and older generation that the current government spending on their generation is too low, as 71 per cent of those aged 65 and over agreed that the government is currently spending too little on their generation, while 65 per cent of people aged 18 to 24 think government spending on their generation is too low.

However, the research found that there is a "strong appetite" for savings more generally amongst younger savers, as, when faced with a hypothetical £10,000 windfall, almost three quarters (73 per cent) of respondents aged 18 to 24 and half (50 per cent) of those aged 25 to 49 say they would put a portion into savings.

In particular, younger people were more likely to want to invest in stocks and shares, with 18- to 24-year-olds three times more likely to say they would invest part of a hypothetical windfall than people aged 50 and older (27 per cent versus 9 per cent for people aged 50 to 64).

And more than half of respondents (51 per cent) aged 18 to 24 said they would put a portion towards housing, such as saving for a deposit, paying rent or mortgage, compared to just 5 per cent aged 65 and over.

However, just under one in 10 respondents aged 18 to 49 said they would save a portion for retirement (8 per cent for those aged 18 to 24 and 9 per cent for those aged 25 to 49).

Given this, M&G CEO life insurance, Clive Bolton, highlighted the findings as demonstration that the “savings culture is far from broken, busting the myth that younger generations are spenders and not savers”.

Instead, he argued that through necessity rather than choice, younger people are focusing on near-term priorities, which will in turn result in different retirement needs.

“Policymakers, companies and wider society will adapt their thinking as the intergenerational contract resets to keep pace with changing societal and economic trends,” he said.

“By creating innovative savings and retirement solutions, we can strengthen the intergenerational contract and put it back on the map.”

The ILC also highlighted the findings as demonstration of the "urgent need" for policy makers and the industry to assess the policies and financial products that are in place to ensure more people can save for retirement.

ILC senior research fellow, Dr Vivien Burrows, said: "The generational wealth gap must be addressed – and quickly – to make sure there’s equitable financial opportunities for future generations.

"We need long-term policies that take the concerns and circumstances of different cohorts seriously, and don’t just pit generations against one another.

“We must tap into what motivates practical savings and investment behaviours and ensure that all people benefit from financial security across our longer lives.”

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