Almost four in ten or 39 per cent people indicated they were not convinced they could afford to retire, according to Hargreaves Lansdown.
According to a survey of 1500 persons done by Opinium for HL in September 2022, the 39 per cent figure is down from just over 34 per cent the year before.
Another quarter, or 26 per cent, indicated that they were uncertain. Men were far more likely than women to indicate they were confident—about 44 per cent of men said this. In contrast, only 26 per cent of women have this status.
Rising prices could jeopardise people’s retirement plans, forcing them to work longer hours or perhaps going back to work after they have already retired.
Hargreaves Lansdown senior pensions and retirement analyst Helen Morrissey says: “The cost-of-living crisis continues to wreak havoc on our finances with people feeling less confident about their ability to retire. According to a recent survey, almost four in ten people said they were not confident they could afford to retire -this compares to just over one-third just a year before.
“There’s a solid third of people who remain confident in their ability to retire over the past year -these could be people with some level of DB pension or other assets that give them some degree of certainty as to their long-term income. The real shift has come from people who were unsure if they had enough to retire who now seem to know they definitely don’t as their costs rise and their investments took a pounding.
“Looking a little closer at peoples’ goals, only a quarter (27 per cent) of those surveyed thought it was realistic to think they wouldn’t have to worry about money in retirement and just over four in ten (41 per cent) thought having enough in savings to cover emergencies was a realistic goal. Obviously, the younger you are then the more time you have to boost your pension contributions to make up any potential shortfalls, but for those coming up to retirement age the prospects look bleak.
“This is the key reason why we are seeing signs of an “unretirement”, where people who have previously retired are now looking to make a return to the workforce. Many believed they had enough set aside to see them through retirement, but the enormous hike in the costs of essentials such as fuel and food is making many revisit their plans.
“Data released by the Office for National Statistics in December showed money is an important motivation to return to work, with 69 per cent of 50–54-year-olds citing it as a motivation. This compares to 62 per cent of 55–59-year-olds and 59 per cent of 60–65-year-olds. Though we expect inflation to start falling this year, it is likely to remain a squeeze on peoples’ plans for the foreseeable future.”
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