This marks a noticeable shift in sentiment, driven primarily by increased positivity among those under 55, the age at which people can first access their pensions, as well as sustained high confidence levels among those at or near retirement age.
Key findings for under 55s:
• Positive pension sentiment increased significantly, from 39% in March 2024 to 50% in July 2024.
• Negative pension sentiment fell slightly from 38% to 33% over the same period, a significant drop from 56% in December 2023.
• The top reasons for feeling positive were: ‘my employer contributions are relatively good’ (45%); ‘my personal contributions are relatively good’ (43%); and ‘my fund performance is good’ (20%).
• The top reasons for feeling negative were: ‘I think my pot is small (34%); I can’t afford to contribute enough’ (32%); and ‘I’m worried about my costs in retirement’ (26%).
Key findings for over 55s:
• Pension optimism remained high, as two-thirds (65%) of over 55s felt positive in July 2024, up 1 percentage point from March 2024.
• Meanwhile, negative pension sentiment also remained low, at less than a quarter (22%) in July 2024, consistent with four months prior.
• The top reasons for feeling positive were: ‘I am entitled to the full State Pension’ (63%); I have a good Defined Benefit pension’ (23%); and ‘I am already enjoying a comfortable retirement’ (20%).
• The top reasons for feeling negative were: ‘I wish I’d saved more’ (29%); ‘I don’t trust the government to maintain a decent State Pension’ (27%); and ‘I’m worried about the impact of inflation on my pension’ (23%).
‘Middle aged’ savers are starting to feel more positive
For the first time since the index’s inception in September 2023, all age groups (18-24, 25-34,35-44,44-54,55-64 and 65+) felt, on average, more positive than negative about their retirement prospects. The most notable change among working-age adults in the last four months is the shift among those aged 45-54. Their dominant pension sentiment is now positive, with 41% of respondents feeling this way. However, this group remains the most negative about their pensions compared to other age groups, with 38% still feeling negative (down from 47% in March).
Distrust in the State Pension has risen
Despite the Labour government’s commitment to maintaining the Triple Lock, skepticism about its ability to sustain a decent State Pension has increased. More than a quarter (27%) of over 55s expressed distrust in this policy in July 2024, an increase from 18% in March 2024, when the previous Conservative government was in power.
Despite these concerns, taking ‘no action’ remained the most popular (45%) response for over 55s when asked what action they might take in the next year regarding their pension. ‘Changing plans to reduce costs’ was the next most common response (13%), followed by ‘taking some of my lump sum’ (9%).
Men continue to feel more ‘pension positive’ than women
Gender disparity in pension confidence persists, although it has diminished in the most recent index. Pension positivity among women under the age of 55 increased from 29% in March 2024 to 41% in July 2024, while positivity amongst their male counterparts remained consistent at 49% during the same period. Similarly, 62% of women over 55 felt positive about their pensions in July, up from 59% in March. This is just a 6 percentage point difference from the 68% positivity rate among men in the same age group.
Becky O’Connor, Director of Public Affairs at PensionBee, commented: “This surge in pension confidence in the immediate aftermath of the election of a new Government strongly suggests that political change impacts on how people feel about their long term financial security.
A decent pension has the capacity to reduce stress and make people generally feel more secure about their overall future. This is the first time since the quarterly index began that every age group has felt more positive than negative about their pensions. It’s fair to say that thinking about pensions traditionally is not always something that gives people joy, so this finding is noteworthy.
We hope the Labour government can continue to inspire people to save more for their futures by pressing forward with key changes that can improve the nation’s retirement outcomes, through the new Pensions Bill.”
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