Key findings from the research:
- Savings concerns amongst older individuals – 36% of those who said they were confident about saving enough for retirement had a substantial savings gap (according to their own goals) of over £100,000. This isn’t just young people being overoptimistic either, half of these people were aged over 45.
- Keeping it in the family – around one in five people surveyed said they expected to receive significant financial support from their families and friends in later life. However, of these people, 15% aren’t convinced they will get it (the equivalent of 1.1 million people). On the flip side, the same amount of people also said they expected to provide financial support to family and friends. This could create a huge strain on already tight personal budgets.
- Working in later life – one in four people are not confident in their ability to secure work and are concerned factors like ill health, discrimination or the wrong skills will stop them from earning and saving what they need for retirement. Though a majority still expects to retire before the State Pension age of 66, a large proportion expects to work into their late sixties and beyond.
- Impact of Covid-19 – while for many Covid-19 provided time to save money on not going out, nearly a third (the equivalent of 12 million people) said the pandemic had negatively impacted their long-term financial security. This finding, recorded just before the current cost-of-living crisis, is concerning.
- Overconfidence – There is a risk that some people are being overconfident about their futures and not being realistic and honest with themselves. Across the report, men reported higher levels of confidence than women, but both men and women were worried about their physical health impacting their ability to keep working.
Phoenix Insights’ key recommendations:
- Eradicate workplace ageism and support skills development and reskilling throughout life – employers must be proactive about tackling age-bias in recruitment and hire age-positively, enable flexible working, support staff with caring responsibilities, and encourage career development and training for staff of all ages.
- Tackle regional inequalities and improve pay and progression – the government should use the levelling up agenda to tackle in-work poverty and the prevalence of precarious jobs with very low pay and few prospects for progression. This will help more people to be able to save for the future. Supporting people with health conditions is also critically important, too many people are forced into early retirement due to health problems.
- Expanding auto-enrolment – the government should look to cover the millions of self-employed people and those aged under 22 with pension auto-enrolment. Additional defaults should be explored, such as auto-escalation of pension contributions when salary increases, along with nudges when personal circumstances might change that enable greater interest/capacity for saving – for example, children leaving home.
- Boost financial information, guidance and education – People should be able to get more holistic financial guidance and advice at a much younger age. We need government and regulators to help make access to good advice and support about our future finances the norm for all of us, rather than the preserve of the wealthy few.
Report and Webinar
- You can download a copy of A Crisis of Confidence report from 30 March
- You can also access the Longer Lives Index digital data hub to explore the data for yourself from 30 March here.
- On Wednesday 30 March, Phoenix Insights is hosting a webinar to discuss the findings from the Longer Lives Index chaired by Politico’s UK Policy Editor. You can sign up and learn more here
[1] The Phoenix Insights Longer Lives Index, conducted in partnership with Frontier Economics, is based on a new survey of approximately 16,500 people, aged over 25, who are not yet retired. This represents a population of 41.7 million people in the UK. It explores their expectations for and confidence in their financial wellbeing in later life.
