Savers ‘pricing in’ state pension uncertainty

The longevity of the state pension is viewed with pessimism, particularly by young people

The general public broadly thinks the state pension will continue to exist in some form. However, it is striking how many young people have little confidence it will be there at all by the time they retire.

Some might say it is unrealistic to expect state pension provision to remain static, given we are living and working longer. Our research suggests people are being pragmatic and not banking on the state pension to support them in retirement.

People appear to be ‘pricing in’ low expectations of the state pension that will be waiting for them when they retire, most likely because they see successive governments continually moving the goalposts, often with good reason.

The success of auto-enrolment will hopefully begin to bridge the retirement savings gap, as people take control and rely less on state provision. After all, private pension savings are one of the best protections against whatever decisions future governments may take on state provision.

Andrew Tully is technical director at Canada Life

The general public broadly thinks the state pension will continue to exist in some form. However, it is striking how many young people have little confidence it will be there at all by the time they retire.

Some might say it is unrealistic to expect state pension provision to remain static, given we are living and working longer. Our research suggests people are being pragmatic and not banking on the state pension to support them in retirement.

People appear to be ‘pricing in’ low expectations of the state pension that will be waiting for them when they retire, most likely because they see successive governments continually moving the goalposts, often with good reason.

The success of auto-enrolment will hopefully begin to bridge the retirement savings gap, as people take control and rely less on state provision. After all, private pension savings are one of the best protections against whatever decisions future governments may take on state provision.

Andrew Tully is technical director at Canada Life

Despite the ‘triple lock’ guaranteeing annual increases in its value, UK adults who are not yet retired expect to receive less than the current full pension.

Source: Canada Life

Increasing pessimism about the future of the state pension

Source: Censuswide survey 1,005 people, November 2018

Increasing pessimism about the future of the state pension

Source: Censuswide survey 1,005 people, November 2018

Increasing pessimism about the future of the state pension

Source: Censuswide survey 1,005 people, November 2018

Increasing pessimism about the future of the state pension

Source: Censuswide survey 1,005 people, November 2018

Increasing pessimism about the future of the state pension

Source: Censuswide survey 1,005 people, November 2018

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