Quick fix not the solution

According to JP Morgan, a quarter of 18 to 34-year-olds would opt out of the government’s proposed National Pension Savings Scheme to pay off short-term issues such as debt or even pay for a holiday.

“The statistics show that young professionals have a poor grasp of exactly how their long-term financial security is going to be impacted by their lack of pension planning,” said JPMorgan Invest director Jonathan Watts-Lay.

“Understandably, people in the 18-34 bracket would rather concentrate on their short term financial obligations rather than looking at the bigger picture and thinking about what standard of living they want to enjoy when they retire.”

His comments come as the government prepares to drastically reform the pension scheme to encourage more people to save for retirement.

However, as there is the option to opt out, it shows that many people would rather worry about their current problems than think about future debts and how they will survive.

David Mond, of debt resolution company, ClearDebt, said: “Living for today is a common underlying cause of the kind of debt that leads to real debt problems – or bankruptcy.

“We find that often people have spent so much on life’s little luxuries, confident that they can afford them, that when real problems hit, they don’t have access to the credit they need to cope. As always the message is don’t wait to pay off your debts: Do it as soon as you can.”