Britain's twenty-somethings have been told they need to start putting some serious money aside

for their old age. But just how likely is that to happen? Features writer Emma Cullwick reports

NIGHTS out on the tiles, nice clothes and regular city breaks - that's what 21-year-old Stephen Rogers likes to spend his hard earned cash on.

And his outlook on life is probably similar to most other young professionals his age.

So Stephen was in for a shock when he learnt the latest figures claim today's 20-year-olds should be saving £320 a month for a pension that would see him having a decent standard of living at 65.

For Stephen, who lives in a shared rented house in London Road, near Worcester city centre, saving cash is the last thing on his mind.

And even if he wanted to, he couldn't, he says, claiming his salary as a dispensing assistant for an optician - substantially less than the average £22,620 wage of a Worcester worker - is too low.

"I do get bonuses sometimes which I could technically save," he says. "But to be honest, my main priority is to enjoy myself. The last thing you think of when you're my age is saving for your retirement.

"I probably spend too much money on cigarettes and alcohol and going out, but I like having a lot of fun. I enjoy going on holiday and I like having a lot of city breaks.

"You're only young once and I think you should enjoy yourself while you can. Most people I know of my age are doing the same."

And he's right to think he's not alone. Only six per cent of 16 to 24- year-olds claim to save more than £200 a month, according to figures released by pensions giant Prudential.

But Stephen is confident that despite the fact he is not part of a pension scheme, he will have saved enough by the time he's 65.

"I'm not scared that I'm not saving at the moment, but I think I'll have to do something about it in a couple of years and have a look at the bigger picture," he says. The picture looks even more bleak for the average 30-year-old, who now needs to save around £400 a month if he or she is to retire comfortably at the age of 65.

That's a huge £340 shortfall of the current average monthly £60 savings of those aged 30. Pensions, it is hoped, will become a bigger priority after new legislation - intended to simplify matters for savers - takes effect on 'A-Day', April 6, 2006.

It will allow company pension scheme members to put in far more than 15 per cent of their annual earnings, which is the present limit.

With so many key pension rules set to change on A-Day, specialist advisers are moving into the sector.

Although pension saving has fallen sharply since 2001, a huge increase in demand for SIPPs, (self-invested personal pensions), is expected, with most savers needing advice.

One provider, Suffolk Life, predicts that more than five million people will hold SIPPs in 15 years' time. Trawling a much wider market of savers is the Bank of Scotland Investment Service, which has a website with detailed information on the A-Day revolution.

The bank is also providing expert advice to maximise retirement income at that critical moment when people stop work.

But the A-Day shake-up will be too late for many, says Debbie Falvey, Prudential's head of retirement planning.

"Many people approaching the end of their working lives take it for granted they can stop work at 65," she said. "The reality is that many will have to keep working into their 70s to make ends meet."

With the Pensions Commission also coming to the conclusion that the 'real' age of retirement in Britain must rise from the present 62 to nearer 70, prospects look grim for millions keen to stop work.

BY the time today's 30-year-olds have reached 65, their average annual incomes are projected to be £49,500 in real terms. To receive a target pension of two-thirds of their annual pre-retirement income at age 65, the average 30-year-old needs to be saving about £400 a month.

For someone aged 20 today, average annual incomes are expected to reach £60,340 by the time they reach 65. To receive a target pension of two-thirds of their pre-retirement income at age 65, they need to save about £320 a month.

The Prudential's head of retirement planning Debbie Falvey said: "People across the UK face taking some hard decisions. Ignore retirement planning and the reality is you will be working well into your

old age.

"As society as a whole is living longer than ever before, people of all ages need to start planning and saving for retirement now."

l Thirty-year-olds who have a lifetime of average earnings may need to continue working until they are 74 given current savings levels.

l The equivalent 20-year-old may need to work until they are 72 unless they increase their current levels of saving.

l More than 60 per cent of people aged between 16 and 34 claim to be saving nothing towards their retirement.