British adults’ confidence in their retirement prospects rose following the general election, PensionBee’s Pension Confidence Index has found, marking the first time since the index began that all age groups have felt "more positive than negative" about their pension.

The index found a “noticeable shift in sentiment” towards pensions over the past four months, as the Pension Confidence Indicator score “surged” to +30 in July 2024, following the election, which was an increase from +22 in March 2024 and “significantly higher” than -10 in December 2023.

PensionBee said this shift was driven primarily by “increased positivity” among those under 55 and sustained high confidence levels among those at or near retirement age.

However, the research showed that, for the first time since the index’s inception in September 2023, all age groups (ranging from age 18 to 65+) felt more positive than negative about their retirement prospects on average.

In particular, for those under 55, positive pension sentiment increased to 50 per cent in July 2024, up from 39 per cent in March 2024.

Additionally, negative pension sentiment for under 55s fell from 38 per cent to 33 per cent over the same period, a significant decrease from 56 per cent in December 2023.

When asked about their reasons for feeling positive, 45 per cent of under 55s said their employer contributions are relatively good, 43 per cent said their personal contributions are relatively good, and 20 per cent said their fund performance was good.

However, when asked about the top reasons for feeling negative, 34 per cent of those under 55 think their pot is small, 32 per cent said they could not afford to contribute enough, and 26 per cent said they were worried about their costs in retirement.

Meanwhile, among those over 55, pension optimism also remained high with two thirds (65 per cent) feeling positive in July, up 1 percentage point from March 2024, while negative pension sentiment also remained low at 22 per cent in July 2024, consistent with four months prior.

Furthermore, over 55's top reasons for feeling positive were being entitled to the full state pension (63 per cent), having a good defined benefit pension (23 per cent), and they already enjoy a comfortable retirement (20 per cent).

Meanwhile, their top reasons for feeling negative were wishing they had saved more (29 per cent), not trusting the government to maintain a decent state pension (27 per cent), and worrying about the impact of inflation on their pension (23 per cent).

PensionBee said that the “most notable change” among working-age adults in the past four months was the shift among those aged 45-54, as their dominant pension sentiment is now positive (41 per cent).

However, the research found that this group also remained the most negative about their pensions compared to other age groups, with 38 per cent still feeling negative, a decrease from 47 per cent in March 2024.

The research also noted that despite the Labour government’s commitment to maintaining the triple lock, there was an increase in scepticism about the government's ability to sustain a decent state pension.

Indeed, 27 per cent of those over 55 expressed distrust in this policy in July 2024, an increase from 18 per cent in March 2024, when the previous Conservative government was in power.

Despite this, when over 55s were asked what action they might take in the next year regarding their pension, taking no action remained the most popular at 45 per cent.

This was followed by 13 per cent saying they would change plans to reduce costs, followed by 9 per cent noting they would take some of their lump sum.

Gender disparity in pension confidence also persisted despite diminishing in the most recent index, with men feeling more confident than women about their prospects in retirement.

Indeed, pension positivity for women aged under 55 increased to 41 per cent in July 2024, up from 29 per cent in March 2024, while during the same period, positivity amongst their male counterparts remained consistent at 49 per cent.

In addition, 62 per cent of women over 55 felt positive about their pensions in July up from 59 per cent in March, a 6 percentage point difference from the 68 per cent positivity rate among men in the same age group.

Commenting on the index, PensionBee director of public affairs, Becky O’Connor, said: “This surge in pension confidence in the immediate aftermath of the election of a new government strongly suggests that political change impacts on how people feel about their long-term financial security.

“A decent pension has the capacity to reduce stress and make people generally feel more secure about their overall future.”

She noted that this is the first time since the quarterly index began that every age group has felt "more positive than negative" about their pensions.

“It’s fair to say that thinking about pensions traditionally is not always something that gives people joy, so this finding is noteworthy,” O’Connor added.

“We hope the Labour government can continue to inspire people to save more for their futures by pressing forward with key changes that can improve the nation’s retirement outcomes, through the new Pensions Schemes Bill.”

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