Nucleus UK Retirement Confidence Index: Advice Gap Gets All the Focus, but Planning Gap Also Matters

Nucleus Financial Platforms, one of the UK’s independent, adviser platform groups, launches the UK Retirement Confidence Index.

The research study has reportedly “involved surveying more than 2,200 UK adults aged 50 and over by YouGov.”

It’s based on responses “to the central question of how confident those approaching or in retirement feel about having enough money to live on for the rest of their lives.”

It reveals the confidence index “is 6.9 out of 10, with a negative outlook.”

Although this ‘score’ is higher than some might “have predicted, there’s detail that indicates underlying sentiment points to challenges ahead for some groups of people who are less confident than others.”

Planning significantly affects confidence. Just over half of respondents (51%) have “a detailed plan for retirement. Only 20% have their plan in writing, but this doesn’t seem to affect confidence (8.1 vs 8.0).”

Those without a detailed plan “have the lowest confidence (4.6). These results clearly indicate that planning is a key driver to people feeling positive about securing a rewarding retirement.”

But despite the power of planning, “half of UK adults (49%) approaching retirement don’t have a detailed plan in place.”

The negative outlook on the overall 6.9 index score “reflects the rapid decline of defined benefit (DB) pension provision and inadequate defined contribution (DC) savings pots.”

It also speaks to more general concerns “about the cost of living for 80% of respondents and inflation for 63%.”

One of the most interesting findings “in the report is that advice itself does not seem to have a material impact on the confidence of those people approaching or in retirement, though it is slightly higher for advised customers at 7.0 compared to a confidence score of 6.8 for those who have never taken advice.”

The research also shows that people “who have drawn on their pension savings report higher levels of retirement confidence than those who have not, regardless of whether they have taken advice.”

Those who have received advice and accessed their savings “score 7.2, compared to 6.6 for those who haven’t accessed their pension funds. Non advised participants of the survey who’ve accessed their pension pots score a confidence rating of 7.3 compared to just 5.7 for those with pensions untouched.”

This may be explained by the fact “that retirees have experienced the immediate and tangible benefits of their savings or perhaps feel buoyed by a lump sum. Although the concern here is that consumers’ decision making may be short term and to the detriment of quality of life in later years.”

Two thirds of respondents’ report “being ‘confident’ they will have enough to retire comfortably though just 16% are ‘totally confident’.”

This sentiment is largely attributed “to an absence of debt.”

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