Rise in confidence for a comfortable retirement | moneyfacts.co.uk

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MONEYFACTS ARCHIVE. This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Derin Clark

Derin Clark

Online Reporter
Published: 10/09/2019

People in the UK are feeling slightly more confident about their ability to retire comfortably than they did two years ago, research from Aegon reveals.

According to Aegon, just over half (52%) of people it surveyed now feel confident about their ability to retire comfortably, compared to just under a half (48%) in 2017. Saying this, one in 10 (10%) of those surveyed admitted that they don’t have any pension savings, while a quarter (25%) of those with pension savings said that they don’t know how much they hold in pensions.

In addition to this, 36% of those surveyed have never estimated their income needs for retirement, which while down from 43% in 2017, Aegon believes still needs to be reduced further to lower the number of people putting themselves at significant risk of being unable to maintain their existing lifestyle during retirement.

Steven Cameron, pensions director at Aegon, said: “It’s encouraging to see an indication of growing confidence over the last two years when it comes to being able to retire comfortably.

“Pensions have frequently hit the news headlines in the last few years. While at times this has been for less good reasons, there have been lots of positive stories such as the success of automatic enrolment and the new retirement flexibilities under pension freedoms, which have been built on by initiatives such as the Pensions Awareness campaign from Pension Geeks. All of this has contributed to raising the profile of retirement planning, leading to people taking more interest and action, improving the confidence people have when it comes to being able to retire comfortably.

“But we must remain realistic. Overconfidence carries risks and people mustn’t be lulled into a false sense of security. While auto-enrolment means millions of employees are saving more for retirement, that doesn’t mean they’re on target for the retirement they aspire to or to maintain their pre-retirement standard of living. Furthermore, the growing population of self-employed are excluded from auto-enrolment and can’t rely on an employer to support their retirement funding. Realistically, there’s a lot more required to make sure you’ve saved enough for the retirement you would like.

“It’s also worrying that a significant minority of people don’t know how much they have in their pension. Those in the 30 to 54 age band are in the best position to take action now to make a big difference to their retirement income. Whatever your age or circumstances, finding out more about your pension funds and prospects can only be a good thing.”

Low annuity income

While optimising for a comfortable retirement has increased, research from Moneyfacts.co.uk has found that annuity incomes are at a historic low. While the introduction of pension freedoms in 2015 provided retirees with more control over how they used money in their pension pots, annuities remain the only way for pensioners to get a guaranteed income for life, in addition to the state pension. As such, they are still a highly popular income source for retirees – for more information about annuities read our guide to annuities.   

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