Ryan FowlerConfidence in retirement prospects surged in 2024, with PensionBee’s Pension Confidence Index rising from -10 in December 2023 to +29 in December 2024, highlighting a significant improvement in sentiment.
The index peaked at +30 in June 2024 following the General Election, dipped slightly to +28 in September, and stabilised at +29 in December, indicating that the Autumn Budget had less immediate impact than anticipated.
Confidence among savers aged 55 and over reached a record high, with 65% feeling positive about their pensions by the end of 2024. This increase was supported by improvements in pension security, including a rise in the number of older savers reporting a ‘good Defined Benefit’ pension (up from 22% to 26%) and satisfaction with pension performance (up from 14% to 17%).
Additionally, concerns about the longevity of the State Pension and regrets over insufficient savings eased, with the former dropping from 27% to 24% and the latter from 29% to 24% between September and December 2024.
However, the outlook is less optimistic for younger savers under 55, where confidence slipped slightly from 49% in September to 47% in December. Declining trust in employer contributions and personal savings were key factors, with the proportion of those confident in employer contributions falling from 47% to 42% and those confident in personal savings dropping from 42% to 38%.
Amid rising financial pressures, fewer under 55s planned to increase contributions (down from 42% to 38%), while the percentage intending to pause their contributions rose from 7% to 10%. Nevertheless, there was a slight increase in confidence regarding pension performance, rising from 20% in July to 27% in December, reflecting cautious optimism about long-term returns.
Lisa Picardo, chief business officer UK at PensionBee, commented: “The rise in overall pension confidence is a positive indicator of resilience among savers in the UK, particularly older generations. However, younger savers face persistent challenges, underscoring the need for consistent policy measures to support retirement security for all workers. Ensuring the stability of the State Pension and promoting regular pension saving habits, particularly among younger generations, will be crucial for long-term financial well-being.”
