Receiving pensions and planning advice is the key to confidence for the majority of savers, a senior director at Axa Life has claimed.
Simon Smallcombe, managing director of AXA Life Invest, said: “Contrary to what you would expect, wealth in and of itself is not the key driver of confidence in your future retirement.”
Instead, regular and active saving is more important.
Mr Smallcombe continued: “The commonly held belief that the wealthiest in society are the most secure simply doesn’t stand up to scrutiny, according to our index. This 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.”
His comments came as Axa Life Invest’s Retirement Confidence Index 2015, which surveyed 1,000 adults approaching retirement, found that 75 per cent of non-retired adults said that financial advice had played a crucial role in their plans for a comfortable retirement.
By contrast, only 45 per cent of people who did not receive advice said they expected to get a comfortable retirement.
In terms of both financial and emotional metrics, it also found that those receiving pensions advice were almost six times more confident they would retire when they wanted to, compared to the self-directed. This was based on net confidence scores of 36 per cent and 5 per cent for advised and non-advised adults respectively.
Surprisingly, the index found that the wealthiest in society were not always the most secure, as a person’s income showed no significant correlation to their level of retirement confidence.
Rather, actively saving for retirement generated confidence and created a psychological positivity, regardless of the amount being saved.
However, research from employee benefits consultancy Portus revealed that one in five people planned to release cash over and above their tax-free lump sum from their pension funds while they were still working.
The main reason was to pay off debt, but many of the same people surveyed said they were worried about not having enough income in retirement.
The poll, carried out by Consumer Intelligence among 1,080 employees in October, revealed that 49 per cent of people in work believed they would have to work beyond 65 because they would not have enough money to live on.
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Steven Robinson, managing director of Bristol-based Clarke Robinson & Co, said: “You would expect some statistical bias as the people most likely to take advice are the ones who are wealthiest and who will also have more money.”
