Britons are optimistic about the retirement they want but confidence wavers around their ability to afford it, new research from PensionBee has revealed.
More than half (56%) of UK adults say they feel hopeful or excited about retirement. The majority want to spend more time with family (59%), travel (55%) and rest (51%).
Yet, these ambitions are not matched by financial certainty. Just 16% have both worked out how much they will need and feel confident they are on track to reach their retirement goals. More than a third (38%) admit they have no idea how much their desired retirement will cost.
Just under one in five (18%) say they are confident they will achieve their retirement goals despite having no idea what these goals will cost.
PensionBee said people also appear to be underestimating the cost of retirement they want. More than three quarters (77%) put the annual cost of a comfortable retirement below the £45,400 benchmark set by Pensions UK for a single person. Nearly half (47%) estimate it would cost £30,000 a year or less, at least £15,400 below the comfortable benchmark and even below the £32,700 required for a moderate retirement.
The research also highlighted a lack of affordability around pension saving. Among the two-fifths (39%) who feel they’ve left retirement planning too late, affordability is the biggest barrier. Nearly a third (32%) say they couldn’t afford to engage with their pension sooner.
Maike Currie, VP personal finance at PensionBee, said: “Britons aren’t short of retirement dreams. What they’re short of is confidence that their finances will make those dreams a reality. That’s the irony in these findings. People are far more certain about the retirement they want than they are about their ability to pay for it.
“For plenty of people, the barrier is money, not motivation. No amount of encouragement can fix a month that doesn’t balance. When the choice feels like paying today’s bills or funding a retirement decades away, today will win.”
Currie said for people in a position to take action, a retirement calculator can help to put a price on the future they want.
“Finding out what they already have and bringing old pensions together can give them a clearer picture of where they stand. Turning a distant hope into something tangible that you can put a number on is a powerful first step. Once you know what you’re aiming for, you can start making a plan to get there,” Currie added.
Main image: retirement, aaron-burden-cEukkv42O40-unsplash
