PensionBee’s latest Pension Confidence Index shows what chief business officer Lisa Picardo called a “substantial shift in public sentiment” over financial futures. However, while 65% of older savers expressed confidence in their pensions – a record high – less than half (47%) of those under 55 said the same.
“Younger savers face persistent challenges, underscoring the need for consistent policy measures to support retirement security for all workers,” Picardo said.
“Ensuring the stability of the state pension and promoting regular pension-saving habits, particularly among younger generations, will be crucial for long-term financial wellbeing,” she added.
Overall, the pension consolidator’s Pension Confidence Indicator jumped from negative 10 in December 2023 to 29 in December 2024. Confidence peaked in June following the general election, dipped slightly in September and stabilised by the end of the year.
Picardo said this suggests that the Autumn Budget may have had a milder impact than previously feared in its immediate aftermath, but noted that many of the policies affecting personal finances haven’t yet been enacted, meaning that any problems will be seen later.
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Rachel Reeves made a number of changes in her Budget that could affect pension savers, with the most significant being that unused pensions and death benefits from pension pots will be part of a deceased person’s estate from April 2027. However, she stopped short of altering pension tax relief or further capping or removing tax-free cash from pensions, as some had feared.
Positivity persists elsewhere
The PensionBee figures came at the same time as a survey from pension and investment group Aegon, which also showed a jump in positivity about personal finances. Three-fifths of savers feel positive about their finances for 2025, with pension saving remaining a top three priority for 11% of those surveyed.
Those aged 50-59 were the most concerned about their finances, with Steven Cameron, director of pensions at Aegon, suggesting that this may be due to realisations that they haven’t yet saved enough for later life as well as Winter Fuel Payment cuts.
“The Government’s recent unpopular decision to means-test the winter fuel allowance may also [have] had a bearing with 50-somethings.
“There is also perhaps a growing realisation for many that [they have] not… managed to save enough for the retirement they want,” he said.
