Young people are failing to save for their retirement

Young people are failing to save for their retirement, according to research by Nationwide.

The figures, published by the building society, suggests 95 per cent of younger workers aged between 18 and 34 do not put cash aside for their old age.

Instead, they use any spare cash to save for more immediate concerns, such as saving for a deposit to allow them to move home or take their first steps onto the property ladder. A total of 34 per cent of young people in this age bracket save for this reason.

The survey of 1,316 Britons also found 31 per cent of young people save money in case of a change in circumstances, such as losing their job. A further 16 per cent save with the aim of paying off their debts.

Richard Marriott, Nationwide's Head of Savings, said:  "Encouraging young people to adopt a savings habit early on is vital. Just putting aside a small amount on a regular basis can make a huge difference.

"We are encouraging people to start saving when they are young through a competitive range of savings account options, including our Smart Junior ISA, launched on November 1."

Nationwide urges those saving for their children to consider five key factors

1. Start saving as soon as you can to ensure the biggest possible nest egg for your children

2. Invest as much as possible, but don't commit to more than you can afford

3. Try to save on a monthly basis as just a few pounds a month can build up over time

4. Keep an eye on tax efficient savings and investments

5. Consider seeking professional advice, particularly if you are planning to open a pension or set up a trust

Nationwide offers the Smart Junior ISA, paying an overall rate of 3 per cent AER tax-free (variable) - including an introductory fixed bonus of 0.9 per cent until October 31, 2013. The rate is paid on balances of more than £1. This Junior cash ISA is available to children residing in the UK under the age of 16 who have never been issued with a Child Trust Fund voucher. No withdrawals are allowed prior to the child's 18th birthday and then only the child can access the money. The minimum opening balance is £1 and the maximum balance for the tax year 2011/12 is £3,600. In line with HMRC regulations, any children who have been issued with a Child Trust Fund (CTF) voucher will not be eligible for a Junior ISA.

It is part of the Society's commitment to encourage savings among both children and their parents, which also includes three branch-based children's savings accounts - the 90 Day Loyalty Smart Saver, 90 Day Smart Saver and Smart Bond.