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British adults’ confidence in their retirement prospects has fallen slightly ahead of what is expected to be a ‘painful’ first Budget from the new Labour government, analysis from PensionBee has revealed.
The research showed that, following a “surge” to 30 after the General Election in July 2024, the pension confidence indicator has dipped to 28 ahead of Labour's Budget on 30 October.
Despite the overall decline, confidence amongst under-55s has increased for the first time, rising from 45 per cent in June 2024 to 49 per cent in September 2024.
The key drivers of confidence for this group were employer contributions (47 per cent) and personal contributions (42 per cent), followed by satisfaction with fund performance (24 per cent).
In contrast, pension confidence for over-55s has fallen from the 65 per cent peak seen in March 2024 to 62 per cent, which PensionBee highlighted as reflection of a more cautious sentiment among this group since Labour has taken office.
This is compounded by increasing distrust in the government’s commitment to maintaining a sufficient state pension, up from 18 per cent in March 2024 to 27 per cent in September 2024.
However, the future of the state pension was less of a concern for working-age adults, as confidence that it will form part of their retirement held steady among 18 per cent of respondents from March 2024 to September 2024.
Adequacy was instead a larger challenge for this age group, with 34 per cent identifying it as their primary worry for the third consecutive Index.
Commenting on the findings, PensionBee’s director of public affairs, Becky O’Connor, said: “The increase in pension confidence among the working population in the first few months of a Labour government suggests high hopes for improvement in long-term finances.
“However, the slight decline in confidence among those in or nearing retirement may indicate increased insecurity as a result of policy signals so far, including cuts to the winter fuel allowance, and general uncertainty.
“Pension confidence is fragile, appearing to be very swayed by sentiment, speculation and general political measures. This underscores how important the tone and content of the upcoming Budget will be to the way people plan and manage their long-term finances.”
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