A new longevity think tank Phoenix Insights published its first report, entitled “A Crisis of Confidence”, presenting analysis by Frontier Economics on financial preparedness for longer lives in the UK.
Phoenix Insights is a new longevity think tank launched by Phoenix Group, the largest long-term savings and retirement business in the UK. The publication is based on data from an inaugural Longer Lives Index developed by Phoenix Insights jointly with Frontier, and is a first look at unique data across five areas critical to preparation for longer lives – savings, health, work, housing and family support.
The report investigates how people are planning their financial preparedness for older age across these dimensions, including the expectations they have and the savings behaviours they undertake. It also looks at how confident individuals are about their readiness on each dimension.
Some of the key takeaways include:
- Nearly half of the population are not confident about their ability to save enough for retirement. While this is largely due to financial pressures elsewhere, the research reveals the reasons are multidimensional and include factors like uncertainty or lack of knowledge on pensions.
- 4 in 10 people currently rent, and only a third of those expect to buy a house– leaving around 11 million of people facing rental costs in retirement.
- One in four people are not confident about their ability to remain employed until retirement, and worry about factors like poor health, discrimination of elderly in workplaces or lack of relevant skills for employment.
- 7 million of people expect to get significant financial support from family and friends in retirement, and on average they are confident about receiving it.
- The pandemic has negatively impacted the confidence about saving adequately for retirement for a third of people, while around 15% became more confident as a result. The impact tended to be more polarised for younger groups.
Phoenix Insights warns that unless actions are taken now to address the nation’s lack of adequate preparation for living longer, millions may face serious challenges later in life. This will only be exacerbated by the current cost-of-living pressures that will have a significant negative long-term impact on individuals. The report outlines a series of policy implications for the government and the industry to consider.
Click here to read the report.
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