The design of workplace pension schemes can significantly influence how quickly young employees are able to buy their first home, according to new research from Hymans Robertson.

Analysis by the pensions and financial services consultancy found that different contribution structures can have a major impact on both homeownership timelines and long-term retirement savings. Modelling a 25-year-old earning £30,000, the research showed that employees in matched-contribution schemes could take more than a decade to save for a house deposit, while fixed employer contribution models could reduce that wait by several years.

The modelling found that an 8% employee and 8% employer matched contribution structure (8% + 8%) could result in homeownership after around 14 years, while a fixed 8% employer contribution could reduce that timeline to seven years.

The findings suggest employers can play a key role in helping younger workers balance competing financial priorities by reviewing how pension contributions are structured. Separating employer contributions from employee matching requirements and offering fixed employer contributions could provide greater flexibility for employees to save for both a home and retirement.

Hannah English, head of DC corporate consulting at Hymans Robertson, 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.”

Hymans is urging employers to take a more deliberate approach to pension scheme design, using modelling to understand how contribution strategies can support both long-term financial security and the immediate financial challenges facing younger workers.

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