Confidence in retirement prospects among Brits "surged" in 2024, with PensionBee’s pension confidence indicator rising from -10 in December 2023 to +29 in December 2024, highlighting growing optimism about financial futures.

PensionBee’s Pension Confidence Index showed that confidence peaked in June 2024, when it hit +30 following the General Election, fell slightly in September to +28 and then increased in December to +29.

The firm said that these results suggested the Autumn Budget, initially expected to bring “significant” economic strain, may have had a milder impact than initially feared.

However, it suggested that as many of the policies announced are yet to take effect, their full influence might be seen at a later date.

Despite the improved confidence level, the data revealed a contrast between the confidence of older and younger savers.

Retirement confidence saw the most significant gains among those aged 55 and older, who reported higher optimism than those under 55.

In December 2024, 65 per cent of older savers expressed confidence in their pensions, mirroring the record high in March 2024.

There was a 3 per cent increase in positivity among older savers from September 2024 to December 2024, reflecting positive trends in pension security.

In addition to this, there was an increase in older people reporting a ‘good’ defined benefit (DB) pension, up from 22 per cent in September to 26 per cent in December 2024.

Meanwhile, the same cohort reported greater satisfaction with their pension performance, an increase from 14 per cent in September to 17 per cent in December 2024.

The research also found the amount of older savers citing state pension concerns decreased from 27 per cent in September to 24 per cent in December 2024, while those who expressed regrets over insufficient saving fell from 29 per cent to 24 per cent in the same period.

However, for savers under the age of 55, confidence in their retirement prospects increased from 39 per cent in March 2024 to 49 per cent in September 2024, before falling slightly to 47 per cent by December 2024.

PensionBee said the key drivers of this decline included waning trust that employer contributions will provide a sufficient pension, down from 47 per cent in September 2024 to 42 per cent in December 2024 and potentially concerns that employers may reduce pension generosity to offset the rising cost of National Insurance payments.

Similarly, confidence in personal contributions also declined, falling from 42 per cent to 38 per cent over the same period.

In addition to this, the number of savers planning to increase contributions decreased by 4 per cent, from 42 per cent in September 2024 to 38 per cent in December 2024, while those intending to pause contributions rose from 7 per cent to 10 per cent over the same period.

Despite these challenges, under 55s confidence in pension performance increased from 20 per cent in July 2024 to 27 per cent in December 2024, indicating a more positive outlook on returns and the potential for long-term financial growth.

Commenting on the index, PensionBee UK chief business officer, Lisa Picardo, said the rise in overall pension confidence was a “positive indicator” of resilience among savers in the UK, particularly older generations.

However, Picardo stated that younger savers face persistent challenges, underscoring the need for consistent policy measures to support retirement security for all workers.

“Ensuring the stability of the state pension and promoting regular pension saving habits, particularly among younger generations, will be crucial for long-term financial well-being,” she added.

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