According to the latest research by Foresters Friendly Society, only 16% of millennials - the generation aged approximately 16-35 - ranked saving for retirement high on their list of priorities.

The research found that millennials were saving for the short term rather than for their retirement with nearly a quarter (26%) saving for their holidays.

Fosters Friendly Society said: “This short-termism is reflected in their savings choices, highlighting a significant lack of understanding when it comes to deciding how best to achieve these financial goals.

More than a third (34%) of UK adults use a standard savings account as their preferred way to save while 27% opt for cash ISAs and 15% just use their current accounts.

In the current low interest environment, none of these vehicles is likely to deliver significant returns, said the society and called for “improved education, amongst younger savers particularly, on the importance and benefits of saving early in order to avoid them hampering their future saving progress.”

Fosters Friendly Society added: “Fewer than one in ten (9%) are taking advantage of the benefits from the Lifetime ISA (LISA) which was developed specifically to help those under 40 years old achieve their long-term savings goals.”

Paul Osborn, chief executive for Foresters Friendly Society said: “There’s a lot of talk about economic uncertainty, and we’re seeing inflation continue to outpace wage growth, so it’s little surprise that people are putting something away for a rainy day. But there’s a real worry that this is being done at the expense of their longer-term saving.”

The researh is based on 2,000 online surveys with consumers and was carried out by Financial Services Provider Foresters Friendly Society.