By JUSTINE TRUEMAN

hen 25-year-old Chris Mitchel, a Website designer from South London, decided to get his life in order and start building his own retirement fund, he thought it would be easy. He rang the hotline at the no-frills financial services firm Virgin Direct and waited for someone to tell him what he needed to do. "I just wanted an idiot's guide to pensions but they sent me all this stuff which I couldn't understand and said that would explain things." Determined not to give up, he tried to get advice on the issue from a local insurance company but was equally dissatisfied. "They just did a big sell job on me," recalls Mitchel. "The guy wanted me to sign on the dotted line then and there, and was shocked when I said I wanted to think about it."

Mitchel's experience is by no means unusual and he sums up the feelings of a number of Generation Xers--those born from the mid-'60s to the mid-'70s--who feel pensions just aren't worth the hassle. According to the Association of Unit Trusts and Investment Funds, the traditional British investor is professional, 51, male and on the verge of retirement. That's changing--new investors are younger, female and hold less senior positions--but few young people have made arrangements for money to live on when they get old. Given the budgetary problems faced by most European governments and the aging of the Continent's population, a comfortable retirement for members of the Gen X age cohort is far less likely than for the baby boomer generation ahead of them.

"I think we'll have this missing generation of people who think they don't have to provide for their own pension and then get whammed," says Ian Millward, investment marketing manager at financial planners Chase De Vere. Gen Xers may also assume they'll be looked after when they see their parents benefit from a fat inheritance. But while boomers are expected to reap these rewards, many won't be able to pass on the same benefits to their children--their longer life expectancy means it will be used up.

A number of people in the finance industry, not surprisingly, say European governments should stand up and tell the public that there won't be enough money around for future generations. "They have to let people know that they will be destitute if they don't do anything," says Stephen Lansdown, managing director of Hargreaves Lansdown, a Bristol-based asset management firm. "What makes people invest is not just tax relief but fear; when they're scared they'll run out of money in retirement, they'll save."

Many of the young people who do have pensions got them by default as part of retirement packages provided by forward-looking employers. Many others won't be so lucky, however. A number of European countries offer seemingly generous state pensions that work as a disincentive for people to move into private sector systems or to set up their own retirement funds. But European governments are unlikely to continue to support their retirement plans at current levels.

A green paper issued by the European Commission discusses the problems of an aging population. But it focuses on investment managers and allowing them to invest in a broader range of assets, not on government policy. The paper points out that if investments return only 2% a year after inflation, a worker would have to put aside 19% of her wages to build a pension worth 35% of her top earnings--if she worked for 40 years. But if the return were closer to 6%, only a 5% contribution would do.

Given the fickle nature of markets and the already strong returns made on most developed markets over the last 10 years, strong investment returns can't be relied upon. Perhaps one solution for Gen Xers who get a late start in saving for retirement will be to put their money into emerging markets like South East Asia, Latin America and Eastern Europe.

A small minority is already enthusiastically grappling with financial jargon and investigating thing such as offshore accounts and ethical trusts for socially-conscious investing. But for the rest a blase approach is perhaps the only alternative. "With any luck I'll die young and not have to worry about it all," says Mitchel.