Brits' overall pension confidence has continued to fall over the past three months, PensionBee’s latest Pension Confidence Index has revealed, with more than half (51 per cent) feeling negative about their retirement outlook.

The index showed that savers feel more negative than positive about their retirement outlook, with a Pension Confidence Indicator of -10 in December 2023, down from -9 in September 2023.

This indicator shows the difference between the proportion of British adults stating they feel negative and the proportion who feel positive about their pension outlook, with a minus number indicating more negative than positive sentiment.

PensionBee also noted that while there was an increase in pension confidence among over 55s in the final quarter of 2023, there was a bigger increase in negative pension sentiment among adults yet to reach the age they can first access their pension.

In particular, the index showed a 7-percentage point increase in optimism about pensions among 55–64-year-olds towards the end of last year, from 38 per cent in September to 45 per cent in December.

In addition to this, fewer said they felt pessimistic, as the index revealed a 9-percentage point drop from 55 per cent to 47 per cent over the same period).

However, pension concerns intensified between September and December 2023 for those under 55, with 57 per cent admitting “quite negative” and “very negative” emotions about their pension, marking a 6-percentage point increase.

This was part of a broader trend, as younger savers felt the most negative about their retirement outlook and were the only savers to feel, on average, less positive about their pension compared to how they felt a year ago.

According to the index, individuals aged 44-54 exhibited the highest levels (63 per cent) of negative sentiment towards their retirement outlook, with nearly half (47 per cent) admitting that they feel “less positive” about their pension compared to how they say they felt a year ago.

The future of the state pension was identified as a key factor, as distrust in the government was identified as a top three reason for negative pension sentiment among over 55s, despite the government recently opting to maintain the state pension triple lock.

For younger savers, however, concerns around the inability to afford contributions (29 per cent) overtook worries about high retirement costs (27 per cent) as their primary pension concern between September and December 2023.

Gender discrepancies were also highlighted, as PensionBee found that 42 per cent of men felt positively about their retirement outlook, compared to 26 per cent of women.

In the working-age demographic, male savers aged 18-25 were notable outliers, however, with 46 per cent reporting being on track for retirement, a significant rise from 31 per cent in September.

This was particularly evident amongst older savers, as over half (58 per cent) of men over 55 held positive pension sentiments compared to only 37 per cent of women.

Working age renters were also more likely (61 per cent) to harbour negative feelings about their pension than homeowners, with 61 per cent feeling negative about their retirement outlook, compared to 52 per cent of homeowners.

PensionBee highlighted this as a "concerning increase" from three months prior (55 per cent and 50 per cent respectively), suggesting that rising rents and a decline in homeownership are making saving for a pension more challenging.

Indeed, the influence of homeownership at retirement remained "profound", as the vast majority (60 per cent) of renting retirees expressed negative feelings about their pension, a stark contrast to homeowners in the same age group who feel mostly positive (54 per cent).

Commenting on the findings, PensionBee director of public affairs, Becky O’Connor, stated: “Brits were feeling increasingly down about their pension prospects towards the end of last year. How we feel about our long-term financial prospects is a key indicator of how other financial pressures and concerns affect our lives.

"Contrary to what you might expect - it’s not all doom and gloom when it comes to how people feel about their retirement prospects.

"It’s good to see positive sentiment among older Brits improve towards the end of last year, possibly alongside the slight easing of cost-of-living pressures, as inflation subsided, as well as state pension increases and a recovery in stock market fortunes.

"Younger workers and current retirees are generally more positive than the middle-aged; men are typically more positive than women and homeowners more positive than renters.”

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