Zarah ChoudharyAccording to the latest Pension Confidence Index from PensionBee, by December 2024, 65% of savers aged 55 and older expressed confidence in their pensions, matching a record high from March of the same year.
The percentage of older savers reporting a ‘good defined benefit (DB)’ pension rose from 22% to 26% between September and December 2024, while satisfaction with pension performance increased from 14% to 17%.
The proportion of older savers expressing worries about the State Pension dropped from 27% in September 2024 to 24% in December 2024, while those expressing regrets over insufficient savings declined from 29% to 24%.
However, savers under the age of 55 continued to face challenges regarding retirement confidence.
Although confidence among this group climbed from 39% in March 2024 to 49% in September 2024, it dropped to 47% by December 2024.
Key factors contributing to this decline included waning trust in employer contributions and personal contributions.
Confidence in employer contributions fell from 47% in September 2024 to 42% in December 2024, likely due to concerns that employers might reduce pension generosity to offset rising National Insurance (NI) payments.
Similarly, confidence in personal contributions also decreased, falling from 42% to 38%.
The proportion of savers under 55 planning to increase contributions dropped from 42% to 38% between September and December 2024, while those intending to pause contributions rose from 7% to 10%.
Despite these challenges, confidence in pension performance among savers under 55 grew from 20% in July 2024 to 27% in December 2024, signalling a more positive outlook on long-term financial growth.
The overall Pension Confidence Index surged from -10 in December 2023 to +29 in December 2024, reflecting a substantial shift in public sentiment.
Confidence peaked at +30 in June 2024 following the General Election, dipped slightly to +28 in September 2024, and stabilised at +29 by December 2024.
This suggests that the Autumn Budget, initially expected to bring significant economic strain, had a milder impact than anticipated, although many of the policies announced are yet to take full effect.
Lisa Picardo, chief business officer UK at PensionBee, said: “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 wellbeing.”
