Retirement confidence has hit a fresh low in the run up to the Autumn Budget, new research from Nucleus has revealed.
Amidst the ongoing speculation over potential policy changes, only 26% of adults feel confident they will have enough money to live comfortably for the rest of their lives. The figure is down from 34% last year and is the lowest point since the Nucleus UK Retirement Confidence Index began.
The overall Retirement Confidence Index score now stands at 4.2 out of 10, down from 4.6 in 2024 and 6.9 in 2023, continuing a downward trend in confidence across all age and gender groups.
Those aged 45-54 and 35-44 have the lowest confidence at 3.2 and 3.4 respectively. Conversely, confidence is highest amongst those receiving professional financial advice, with a score of 5.5 out of 10, well above the 4.2 national average.
Nucleus said confidence has been shaken by changes and speculation around pensions and tax especially in the lead up to the budget. Nearly half (44%) of adults said they were worried about pensions being brought into scope for inheritance tax from April 2027, and three in five (59%) were concerned about possible cuts to tax-free pension lump sums.
Just 16% believe the new Independent Pensions Commission will make a meaningful positive difference.
Andrew Tully, technical services director at Nucleus, said: “We’re seeing a deep erosion of trust in the retirement system. Constant tinkering with pension rules makes long-term planning feel pointless. The IPC is a step in the right direction, but confidence won’t return until people believe the rules will remain stable. We need clear communication and a joined-up approach across pensions, housing and savings to give people the certainty they need to plan properly for the future.”
The survey also showed a widening of the gender confidence gap. Men recorded an average confidence score of 4.6, compared with 3.8 for women. Nearly half of women (45%) said they do not currently contribute to a pension, compared to 40% of men.
Women are also far less likely to have other forms of savings, with only 22% holding a private pension versus 30% of men, while 25% have cash savings compared to 35% of men. Similarly, 28% hold an ISA compared to 36% of men.
Tully continued: “The gender gap in retirement confidence is a clear warning sign. Women are saving less, have fewer financial products, and are less confident about their long-term prospects. We need more targeted communication, flexibility in saving options, and a concerted effort to make financial planning more inclusive so women aren’t left behind.”
Additionally, the report found that cost of living pressures also continue to impact retirement saving. More than two fifths (43%) of UK adults do not contribute to a pension, with 41% citing the rising cost of living as the main barrier to saving more or anything into their workplace or private pension. Rent and mortgage payments (24%) and debt repayments (16%) were also major obstacles.
More than two thirds (68%) of respondents said they would feel more confident about retirement if they had learnt more about financial planning, pensions and investing at an earlier age. Four in ten (42%) believe people should start planning in their 20s.
Tully said: “Financial education needs to start early. Empowering people to understand pensions, investment and tax from a young age would make an enormous difference to future confidence. But it’s equally important that adults can access affordable, trusted advice to help them make informed decisions at key stages in life.”
The Retirement Index also found that doubts around the future of the State ension are adding to uncertainty, with 54% of UK adults believing it won’t exist in its current form within ten years and 25% saying it may disappear altogether.
Tully added: “The state pension remains the cornerstone of retirement income for millions, yet confidence in its future is collapsing. People deserve clarity and consistency. They need to know what they’ll receive and when. Without that certainty, it’s almost impossible to plan effectively for the rest of their lives.”
Nucleus is urging policymakers to work with the Independent Pensions Commission to take a long-term view and promote consistent, future-focused rules that encourage saving and planning.
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