Young people more worried about pension challenges

While people in the UK are generally becoming more hopeful about their financial futures, younger savers are less optimistic. 

According to PensionBee’s latest Pension Confidence Index, people’s confidence in their retirement prospects “surged” during 2024. 

However, the index highlighted a marked contrast between the views of younger and older savers. 

For example, 65% of over-55s expressed confidence in their pensions. That matches the record high recorded in March 2024. 

But confidence has been falling among under-55s, dropping from 49% to 47% between September and December 2024. 

Interestingly, confidence in pension performance among under-55s actually grew from 20% in July to 27% in December last year. 

So a significant proportion are hopeful when it comes to returns and the chances of growing their pension pot. 

But there are a few specific concerns affecting confidence among many in this age group. 

For instance, trust that employer contributions will provide an adequate pension dropped from 47% to 42% between September and December last year. 

Meanwhile, confidence in personal contributions fell from 42% to 38% during this period, and the proportion of people planning to pause contributions rose from 7% to 10%. 

By contrast, the share of over-55s reporting greater satisfaction with their pension performance went up from 14% to 17%. 

At the same time, the proportion of people expressing concern about the longevity of the state pension dropped from 27% to 24%. 

In addition, the number of over-55s feeling regrets over the amount they’ve saved fell from 29% to 24%. 

Lisa Picardo, chief business officer at PensionBee, described the rise in overall pension confidence, especially among over-55s, as “a positive indicator of resilience among savers”. 

However, she noted that younger savers face “persistent challenges”. 

This, she said, underscores the ned 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,” Ms Picardo added.