Researchers asked young Brits what they’d do with £25k, and as many would gamble with it as put it in a pension pot.
What it means: It’s pretty common for economic policies to be promoted as the best way to make us all richer. While not everyone agrees that we should focus on improving the money in our pocket above our wellbeing, the way that many economies around the world operate means that having more cash can (for better or worse) often mean having access to a better quality of life.
But research on what we’d do with a £25,000 windfall has shown that we might not use extra money in the most savvy way. Only 5 percent of adults say they’d pop the £25,000 in their pension pot, half the amount that would spend it on a holiday. And the problem is even worse for 18-24 years, who were as likely (2 percent) to say they’d blow it all in a casino as put it aside for their golden years.
Why might this be a problem? Well, at the moment all of us can expect to live at least twelve years after we stop working (the retirement age is going up to 67 from 2028, and UK life expectancy is 79 for men and 83 for women) and during that time we’ll need to pay for things like food and housing and energy bills, as well as some fun stuff. And most of us don’t have anything like enough money put aside to fund that.
Many people think the government will cover these costs, but there’s a growing worry that the state pension costs too much money to be sustainable: it already uses up 7.4 percent of our national income, and the number of retirees is growing. At the same time, our workplaces are also becoming much less generous with their pension schemes. The upshot is that if we don’t save more ourselves, we’re risking having a less comfortable old age than we’d like.
Read our explainers on the cost of living and economic decision making.
… most of us live in a home of friends, family, or with a partner. Our homes are like mini-economies, with their own systems of dividing up work, providing resources, and exchanging skill-sets. Not only do these affect our ideas of who does what on a wider scale, our homes themselves and where they’re located have an effect on the economy around us, and the economy we experience.