A new study, from peer-to-peer lending platform Lending Works, has revealed that almost a quarter of UK adults believe they’ll never retire.
Pensions are, of course, currently under scrutiny and the Government is facing a black-hole – as we live longer, and spend more time living on a state pension, the cost of pensions is ballooning. The Government has already confirmed that it’s looking at increasing the pension age, while the triple-lock guaranteed on pensions looks to be in doubt. Little wonder, then, that optimism among non-retirees is low.
When asked whether they believe they’ll be able to retire, 22% stated that they felt retirement would not be an option for them. The rise in living costs, as well as ever-increasing retirement ages could be two reasons why the outlook is so grim.
Lending Works’ report also drilled down further into the demographics of those less hopeful about retiring with financial security.
Women were more pessimistic than men about their chances, with 24% believing it was not an option, compared to 18% of men. Those figures almost identically mirror the differences between those working part-time hours (23%), as opposed to full-time workers (17%) – women, of course, are statistically more likely to be part-time employees.
The issue also showed a huge disparity between social classes: 29% of those in the C2DE grade thought retirement would be an impossibility, a figure that dropped to 15% for the more comfortable ABC1s. Or, to put it another way, the report explores how gross household income dictates pension possibilities – while 62% of those earning £30,000 pa or less aren’t hopeful about their retirement, only 21% of workers earning £30-45k think retirement unlikely. The more earnings, the bigger the drop. On a salary of £45-60k? Then only 5% of your peers feel retirement won’t happen; that further falls to 4% for those on £60-100k.
And it’s not those who are approaching retirement age who appear most worried. Instead, 25% of those chiefly worried about if they’ll ever be able to afford to retire are aged between 35-44; a time of life when families and careers are typically in place, and job security and future financial security are of paramount importance. It’s the young – 18-24-year-olds – who are least concerned about future retirement; just 17%, by far the lowest figure, think they won’t be able to retire one day.
Lending Works also exposed lingering disparities across the country, where those in the North East (14%) were more confident about retirement than those living in the West Midlands (27%). That’s closely followed by the North West (26%) and the South East (25%), while those living in London were much more likely to believe they’ll be able to retire; 19% of the capital’s citizens thought it unlikely.
However, what this study shows is that fears about pensions and retirement is cross-sectional – concerning everyone, no matter what age, class or region of the country they live in. And at a time when a genuinely worrying 34% of UK adults aren’t saving a penny for their future retirement, more work needs to be done to raise awareness of savings and pensions options for everyone.