A lesson the old can learn from the young

New research suggests that younger savers have something to teach older people.

Having worked for or with many different companies, it's clear to me that some people don't respect experience, with veteran employees sometimes shunted aside by management on the assumption that a fresh degree, youthful energy and a Twitter account has got to be more useful than 30 years' hands-on experience.

Yet prejudices sometimes work the other way too. Warren Buffett, the world's most successful investor, once said that when he was young he was saying all the same things he does now, but no one took him seriously. Now a massive crowd of fans turns up each year – this year 40,000 people – to hear what he has to say. And it's always a variation of exactly what he's been saying for decades.

Buffett, 80 this year, now has the record to prove that what he was saying in his twenties made sense, but without a record it's not so easy to spot the wise young. That's why today I'm turning the tables to try and find something we can learn from them.

It's not easy

The truth is that it's not easy because, like Buffett, we often won't learn that the smartest of our young people were onto something good until they've proven themselves after many years, and have developed a few wrinkles already.

But the best assistance that I've come across to my goal today comes in the form of Santander research.

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Older people aren't saving as much, with those savers aged 35 to 54 saving £112 each month and savers over 55 putting aside £107. Naturally older people will have more savings and security between them on average, which goes some way to explain it.

Yet older people still don't have anywhere near enough savings. Not only have our personal savings declined significantly over the decades but several reports over the past few years have shown that the average retiree has saved just the low tens of thousands in preparation for post-work living.

Even if you've paid off your mortgage, that small pot could mean a meagre retirement. Older people on average have more disposable income but are not using it to prepare for their future like many prospective property owners are.

I think a portion of those older savers could consider the single-mindedness with which some younger people are preparing for their futures and do the same. There's a good chance that we will live for two or three decades beyond retirement, which requires a substantial pot. If you're facing a late retirement because you haven't saved enough in your naïve youth then you can mitigate that by saving more now.

Fool's Gold?

The Santander research is cunningly written and neglects to say quite a few things such as how many young people aren't saving at all, which only reinforces the obvious reality that, for the most part, young people do have more to learn than their more experienced elders.

I also think it likely that a huge number of young people who are living beyond their means could learn from their peers who are planning for their futures.

Where should you save?

If the time has come for you to start saving more, where are the best places to put your hard earned cash?

Sadly, it's a sign of the times that savings rates across the board are pretty unimpressive. But it's still very important to put some cash aside. If you're after instant access to your money - possibly for your emergency fund - the current best buy is the Alliance & Leicester Online Saver Issue 7. You will need £1,000 to open the account, but you can make penalty-free withdrawals whenever you need to.

If you have yet to use your tax-free cash ISA allowance, you can earn 3% with the Brighter ISA from the Market Harborough Building Society. You'll need a minimum deposit of £100 for this account. Meanwhile, if you like the idea of saving each and every month, and you can leave your cash untouched for a year, you could earn 4% with a regular saver. If you meet certain eligibility criteria, you may be able to earn even higher rates. Find out more in Earn 8% on your savings (with a catch).

Last wise words

Whilst side-stepping questions about my age for dignity's sake, my last words of wisdom are that you can get savings accounts and cash ISAs specifically targeting young or old, but most of the time (not all the time) they're not as good as the non age-restricted accounts. For even longer-term planning, consider shares ISAs and pensions.

Compare savings accounts and ISAs at lovemoney.com