Six in ten millennials (59%) reckon their current life stage means they struggle to save for retirement, with only one in five (20%) saying paying into their pension is a priority.

Millennials are twice as likely than any other generation to cite childcare as a reason for not saving, according to new research from Phoenix Group.

Millennials, defined in the research as people in their late 20s to early 40s, are prioritising short-term finances over retirement plans, according to the study.

For some, immediate financial pressures have led them to decrease (7%) or stop (7%) pension contributions in the last year.

Six in ten (59%) millennials are struggling to save for retirement but hope to save more in the future, compared to 48% of Gen Z and 39% of Gen X.

A quarter (25%) said income change is the main reason, and a similar proportion (24%) cited childcare responsibilities.

Other life events hitting millennials’ retirement hopes include parental leave, becoming a homeowner and career change or break. Women are also disproportionally impacted at this stage of life as they are more likely to take on childcare and caring responsibilities.

Patrick Thomson, head of research analysis and policy at Phoenix Insights, said: ““The stereotype of the spendthrift generation is all too familiar when it comes to millennial finances, but the reality is far removed from the ‘avocado on toast’ tag placed on them.

“As a millennial myself, I know first-hand the pressures many at this stage face weighing up competing priorities that pull us in different directions. This can lead to day-to-day essentials, such as housing or childcare costs, being prioritised over longer-term savings goals.”

He warned of the risk that if people don’t readjust their savings once they have got through a short-term financial challenge, they will reach retirement with much less than they’d hoped for.

He said employers play a vital role in supporting their staff to maintain retirement saving at key life stages, including continuing employer contributions during parental leave.

• The research was conducted by Opinium for Phoenix Group in September among 4,000 UK adults.