A third (34%) of savers surveyed by the Pensions and Lifetime Savings Association (PLSA) considered themselves to be struggling, compared to 44% in 2023.
However, workers are worried about the level of the state pension, with half (52%) thinking the current £11,502 amount will not be enough to avoid poverty in retirement.
Almost three-quarters think the triple lock should remain and around half (51%) believe that should rise.
There’s a strong belief that the contributions from employers should increase too. Over half (51%) believe the minimum amount businesses pay should rise to 12% from its current 8% level.
Of those paying into a workplace pension, one in seven pay more than 12% of their earnings into the retirement pot, with an average of 9%.
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The sentiment from savers to bolster their retirement fund follows reports that Chancellor Rachel Reeves is ready to raid the pension tax-free lump sum limit.
However, Reeves insists that any rumours of the tax-free amount falling by two-thirds from £268,275 to £100,000 are “pure speculation”.
It also comes at a time when the Government announced the Winter Fuel Payment will be means-tested for this year.
This move has been met with a legal challenge launched by Scottish pensioners, who claim the Government didn’t follow the correct procedure when making the decision.
‘Essential we act now’
Nigel Peaple, chief policy counsel at the PLSA, said: “Although many people are still feeling the effects of the rising cost of living, there are signs the peak of the crisis may have passed for certain segments of the population.
“Despite ongoing concerns about pension adequacy, over 80% of people believe their employer should contribute at least as much as, or more than, the employee. It’s essential that we act now to ensure people have enough savings for a secure retirement.
“This means maintaining the value of the state pension and gradually increasing minimum AE contributions from 8% to 12% over the next decade. In doing so, contributions should be evenly split between employers and employees, helping to ease the concerns of UK savers.”
Peaple added: “While there is a desire among savers to see pension investments supporting UK companies and public services, this should not come at the cost of lower returns. Achieving the best possible returns must remain the priority, whether those investments are in the UK or overseas. We ask that the Government strikes the right balance between supporting domestic growth and delivering strong returns for savers.”
