Growing divide between older and younger workers on pensions

The confidence of people over 55 in their ability to retire has risen slightly while it has fallen among younger people, according to a survey by PensionsBee.

Its latest Pension Confidence Index – which measures sentiment towards retirement – found an increase in pension confidence among over 55s in the final quarter of 2023, but a bigger increase in negative pension sentiment among adults yet to reach the age they can first access their pension over the same period.

There was a 7% increase in optimism about pensions among 55-64 year olds towards the end of last year, from 38% in September to 45% in December. Meanwhile, fewer said they felt pessimistic. There was a 9% drop from 55% to 47% over the same period. Over 65s were even more positive in December, with over half (53%) feeling confident about their pension, although this was a similar proportion to September.

Conversely, pension concerns intensified between September and December 2023 for those under 55, with 57% admitting “quite negative” and “very negative” emotions about their pension – a 6% increase in negative sentiment over the period.

Individuals aged 44-54 exhibited the highest levels (63%) of negative sentiment towards their retirement outlook and are the only age group to feel, on average, “less positive” (47%) about their pension compared to how they say they felt a year ago. This is a significant change from September 2023 when most (49%) 44-54 years olds felt “the same” about their pension compared to a year ago and only around a third (38%) felt “less positive”.

In general more than half (51%) of those surveyed continue to feel negative about their retirement outlook, while positive sentiment has decreased from 42% in September 2023 to 41% in December 2023, indicating a slight decline in overall pension confidence over the last three months.

The State Pension remains a key factor behind whether people of any age feel good or bad about their future. Despite the government maintaining the triple lock and announcing a State Pension rise in April, distrust in the government remains a top three reason for negative pension sentiment among over 55s.

For younger savers, concerns around the inability to afford contributions (29%) overtook worries about high retirement costs (27%) as their primary pension concern between September and December 2023.

Despite under 55s generally exhibiting negative sentiments, men were (42%) more likely to express positive feelings about their pension than their female (26%) counterparts. In the working-age demographic, male savers aged 18-25, are notable outliers, with 46% reporting being on track for retirement, a significant rise from 31% in September.

Gender disparity persists among over 55s, where over half (58%) of men noted positive pension sentiments compared to only 37% of women.

Working age renters (61%) were also more likely to harbour negative feelings about their pension than homeowners (52%). PensionBee says the vast majority (60%) of renting retirees express negative feelings about their pension in stark contrast to homeowners in the same age group who feel mostly positive (54%).

Fewer self-employed people noted concerns about their pension (falling from 61% in September to 56% in December), a similar level to their employed counterparts (54%), despite their exclusion from Auto-Enrolment.

• Vote  
• 0
• 0
• You already voted!