Confidence in retirement savings on the rise

Confidence in retirement savings on the rise

The number of people that are confident they will have enough savings in their pension pot to retire comfortably has risen in the past two years, according to Aegon.

Research from Aegon, published today (September 9), found out of 830 people polled 52 per cent felt confident about their ability to retire comfortably – an increase from 48 per cent in 2017.

But while retirement confidence was improving many were still unclear when it came to planning their retirement, according to Aegon.

One in ten individuals admitted they don’t have any pension savings, while 36 per cent have never estimated their income needs for retirement. However, this reduced from the 43 per cent in 2017.

A quarter of those with pension savings said they didn't know how much was in their pot.

Although this was mainly found among those aged 35-54 (30 per cent), about two in ten (19 per cent) 55-64 year-olds also didn't know how much they held in pensions, despite their looming retirement.

Steven Cameron, pensions director at Aegon, warned people mustn’t get too confident and believe they have saved adequately when this isn’t the case.

Mr Cameron 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.

“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.”

Mr Cameron urged people to make a plan for retirement now so there is more time for the savings to grow.

He said: “A good place to start is by basing your financial needs in retirement on your current lifestyle and adapting it to suit the retired you.

"There are online tools available to help you do this or for a personalised picture, seek financial advice."

Kay Ingram, director if public policy at LEBC, said advisers played a key role in helping savers plan their retirement and ensure that income needs continue to be met throughout retirement.

She added: "Advisers can also coach retirees to ensure that they take appropriate levels of risk with their savings and pensions, minimise the tax they pay as a family and ensure that unwelcome events such as bereavement and ill health can be managed.

"Advisers can assist retirees with will writing, power of attorneys, care fees planning and inheritance strategies so that funds can be released at an appropriate time to the younger generations and tax efficiently."