More than a third of young adults have yet to start saving for their retirement, according to a new report.

The study polled 18 to 34-year-olds and found widespread recognition of the need for a pension but less evidence they were taking practical steps.

Sixty per cent gave "lack of cash" as the main reason for not saving for their retirement, the same number who said they were worried about not having enough money when they are old.

The poll found 38 per cent had not started saving for their retirement and 19 per cent had no immediate plans to do so, even though 45 per cent agreed that people aged in their 20s should begin a pension.

Diann Hartnell, head of savings at Lloyds TSB, which produced the report, said: "These alarming statistics suggest that, while the penny has finally dropped that saving for retirement is important, many of the nation's 20 and 30-somethings are adopting an 'ostrich mentality' when it comes to pension provision.

"Lack of financial know-how, coupled with a desire to enjoy their hard-earned cash now, means that young people could risk an impoverished old age in the future."

The study follows similar reports from other organisations.

Earlier this month the Institute of Directors said British people were chronically "under pensioned" and the Government was underestimating the seriousness of the UK pension crisis.

It said there was an estimated £27 billion shortfall between what people had saved and what they expected to live on in retirement.

The paper blamed a combination of factors for the situation, including inadequate savings and falling stock markets.

Friday April 25 2003