YOUNG people face sleepwalking into a pensions crisis if unions do not issue a wake-up call now, Unison warned yesterday.

The union told the TUC’s Young Workers’ Conference that young people are facing a “looming pensions crisis.”

Unison warned that with defined contribution schemes being scrapped for younger workers, they are increasingly reliant on defined schemes that are riskier and can pay less in retirement.

Young workers in Britain need to put away 18 per cent of their earnings each year in order to have an “adequate retirement income,” the International Longetivity Centre-UK reported in 2017.

The amount needed to put aside rises to 20 per cent if young workers want to have the same retirement income as today’s pensioners.

Unison said that with ever-rising rents, diminishing wages and poor job security, saving this much money could be impossible.

Young women often find themselves in lower-paid roles than young men as a result of the gender pay gap, making it more difficult for them in retirement.

Female apprentices are the most disadvantaged as they earn 21 per cent less than their male counterparts on average, according to the Charted Insurance Institute.

Retirement planning is especially important for young workers and employers as well as governments have a responsibility to support workers in making informed decisions about their retirement, banking union Accord said.

Young workers need to understand how the decisions they make today will affect their future, the union warned.

Accord’s Chris Fullard said that the lack of education on pensions were leaving young workers at risk of making poor decisions through no fault of their own.

“We live in an uncertain world, but hard-working young people deserve certainty in their futures and their income,” he said.

The Musicians Union’s Sam Murray said that a majority of their members are self-employed and there is “hardly any” information on how pensions work for young people to access when starting out in their careers.

Fay Lockett, of education union NEU, said that many young teachers are opting out of the pensions schemes as they cannot afford current life standards.

“It’s important to educate on the importance of pensions and create discussions around it,” she said.