You may think that having a decent income is the key to being confident in retirement, but according to research, that may not be the case: figures from AXA Life Invest reveal that it's regular saving, rather than income, that's the key driver of confidence in retirement.
The latest Retirement Confidence Index found that, on average, higher earners are only six percentage points higher in terms of retirement confidence than middle income earners, at 62% and 56% respectively. However, confidence levels rise dramatically the more respondents' saved, with only 24% of those who do not save at all classed as truly confident, a figure that rises to 37% for those who save £100-£300 per month, 53% for £300-£500, and 57% for those who save over £500 a month.
Saving is good for you!
The figures will come as welcome news to those who may not be in the higher earning spectrum. They can take heart in the fact that the wealthiest people in the UK are not necessarily the most confident in, or prepared for, their future retirement, because when that income stream switches off, they'll be in the same boat as anyone else.
Instead, actively saving for retirement can be far more beneficial as you'll be safe in the knowledge that you're building up a comfortable pension income, giving you greater confidence and less concern over the future of your finances, so those who save towards retirement reap rewards in more ways than one.
"Contrary to what you would expect, wealth in and of itself is not the key driver of confidence in future retirement," said Simon Smallcombe of AXA. "Instead, regular and active saving is more important. The commonly-held belief that the wealthiest in society are the most secure simply doesn't stand up under scrutiny, which suggests that those who plan for the future and squirrel away consistent savings each month can be just as confident as high earners. Happiness and contentment in your golden years isn't dependent on wealth alone."
As the research shows, it doesn't matter how much you earn – but it does matter how much you save. But, even saving small amounts on a regular basis can make all the difference, not only to how you feel about retirement, but in terms of the kind of pension pot you could build, so it's time to get involved! You'll want to start the process by enrolling with your workplace pension (if your company doesn't have a scheme yet, it soon will do), which can give you the peace of mind you need to know you're suitably prepared for your post-work years.
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