If we were to re-work the Marshmallow Test, swapping young children for millennials and marshmallows for a ‘modest property now versus big pension later’ test, I’m pretty sure that most would still choose property.
We all need somewhere to live, after all – and property is emotional.
Property, and saving for a deposit is likely to be the sweet of choice for young people.
However, if this is at the expense of saving nothing for their pension when young, they may be doing themselves a disservice, because this is when saving more can make the biggest comparative difference.
It’s a common belief that the largest financial asset is a house. But if you start saving into a pension early enough, it is likely to be worth considerably more than your house by the time you get to retirement.
And that will buy a lot of avocado on toast and flat whites (with or without marshmallows).
Matthew Yeates is investment manager at Seven Investment Management
