The consultancy examined how different scheme designs affected the “financial trilemma” that young people face over whether to prioritise saving for retirement, building a house deposit or simply dealing with rising living costs.
It found that switching from a matched contribution to a fixed employer contribution structure for pensions could shorten the timeline for saving for a house deposit by several years.
Hannah English, head of DC corporate consulting at Hymans Robertson, called on employers to look at their pension scheme design and contribution structure to help their employees reach their financial goals.
She said: “What our research really shows is that the design of a pension scheme can make a genuine difference to how manageable big financial decisions can be for younger employees.
“The way contributions are set up doesn’t just shape retirement outcomes far in the future, it can also influence the timing and affordability of achieving other goals, like buying a first home.”
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The Hymans Robertson report found that a generous matched contribution pension could lead to homeownership after 14 years of contributions, but that could be shortened to nine years by reducing contributions and increasing savings amounts for a deposit.
English added: “Different approaches lead to very different results.
“Approaches that allow a bit more flexibility at different stages of life can help people make progress on housing sooner, while still keeping them engaged with pension saving. Modelling for a fixed employer contribution (8%) that isn’t dependent on employee contributions allows for increased saving for a house deposit, with the timeline to a first home reduced to just seven years.
“This highlights how much influence employers can have through the decisions they make on scheme design. The structure of contributions can either force people into difficult trade‑offs or, give them more room to balance competing priorities early in their careers.
“For employers thinking about how best to support their employees and their financial wellbeing, this underlines the value of taking a step back and looking at pension contribution design more deliberately.”
Recent analysis by Pepper Money showed it now takes over 11 years to save for a house.
