Under 35s are leading the way when it come to a pensions revival, according to new figures released by HMRC.

The figures show that under 35s now represent the largest group, making up 34% of those who contribute to a personal pension.

HMRC says they challenge the perception that the younger generation lives for the moment and neglects the need to save for the future.

2.7million under 35s are reported to be contributing to a personal pension – the highest number since records began, and up 35% on the previous year.

Alistair McQueen, savings and retirement manager at Aviva, said: "The financial challenges facing the younger generation are well reported – including rocketing property prices, student debt and job insecurity - so it is therefore hugely to their credit that they are leading the way in Britain's pension revival."

One area of concern, however, is the decline in saving amongst the self-employed community.

The number of self-employed people saving in a personal pension has fallen to 380,000 in 2014-15 – the lowest number since records began in 2001, down from a peak of 1.2 million in 2002-03.

"As the number of people who are self-employed continues to increase – reaching 4.7 million in the latest official statistics – it is concerning to see the number of savers in this community continues to fall," McQueen said.

He added that automatic enrolment has played a big part in this pensions revival.

"In 2017, the government will review the future of automatic enrolment and we are committed to its continued success and have launched our own Pre-Review ahead of the government's formal review."

By contrast, a separate report by Now Pensions found nearly half of 18-30 year olds admit to poor knowledge of pensions, while three in five don't know what a workplace pension is.

Now Pensions CEO Morten Nilsson, said: "This pensions blind spot amongst younger people should be raising a warning flag for the government and industry.

"Auto enrolment is going to bring thousands of younger people into workplace pension saving, but if their understanding is poor, there's a real risk that the policy will be undermined.

"The industry needs to work harder to eradicate jargon, making pensions more understandable for young people so the benefits are better understood."

First published 06.09.2016

Lindsay.sharman@wilmingtonplc.com