New app lets young Brits grow pensions with cashback rewards

A new fintech solution aims to address persistent disengagement among young Britons with retirement savings by connecting pension contributions to everyday cashback and loyalty rewards.

Pension engagement

Chest, a newly launched app, seeks to encourage Generation Z and millennials to save for retirement by depositing cashback from retailers including Amazon, Sainsbury's, Starbucks and Tesco directly into users' pension pots. The company says it has already built a waitlist of over 1,200 people ahead of the app's rollout.

Currently, data shows disengagement with pensions remains high among people under 45. Only 20 per cent of those aged 18 to 21 are saving into a pension, according to recent government research. In consumer polling commissioned for Chest, 39 per cent of Gen Z and millennial respondents who are not yet retired say they are unable to contribute to retirement savings, either due to affordability pressures or a focus on more immediate financial priorities.

Many young adults cite anxiety and uncertainty regarding their retirement. Over a third of under-45s surveyed reported feeling worried or uncertain about their future savings. 

App development

The Chest app offers to streamline retirement savings by leveraging routine digital behaviour. Users' cashback and loyalty rewards from popular consumer platforms are automatically deposited into their pension accounts, supplementing any additional automated contributions they may set up.

The company founders argue that the retirement industry must evolve to serve digital native cohorts better.

"Despite being anxious about our financial future, battling the high cost of living means that we have nothing spare to put into a pension even when we earn above average salaries," said Ali Adam, Co-founder of Chest. "There is a recession of trust towards pension companies, particularly for younger consumers. It's not surprising that we are disengaged from saving for retirement. We built Chest to make saving easier by using money that we're already earning from daily spending such as the weekly shop or buying a coffee,"

Jason Murphy, Co-founder of Chest, said they are excited to be the first British startup to "shake up" the UK pension industry with an approach targeted towards younger generations.

"Young people, like many others struggling to keep pace with the high cost of living, are prioritising more immediate life costs and short-term savings," Murphy said. "The long-term consequences will be hugely detrimental, impacting the retirement plans of millions of people and putting yet more burden on future Governments."

Cashback saving habits

Despite low engagement with traditional pensions, young consumers are regular users of loyalty and rewards platforms. The Chest survey found 72 per cent of Gen Z and millennials use or earn cashback through reward schemes monthly, and many will switch brands for better incentives. Additionally, Gen Z and millennials save an average of GBP £6 to £40 monthly using discounts, cashback or rewards.

Chest projects that if a 27-year-old diverts GBP £30 per month from reward and loyalty schemes into a pension, this could amount to an extra GBP £100,000 by retirement.

Despite limited participation in retirement savings, optimism remains. One in five young people believes their workplace pension alone will be sufficient, a rate higher than that seen among older adults.