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Do Britons have confidence in their pension prospects?

In theory, approaching retirement should be an exciting prospect. After years of hard work, diligent saving and careful planning, savers should be poised to finally be able to reap the rewards and spend time pursuing their true passions. However, the past two years have certainly thrown a spanner in the works.

The coronavirus pandemic dominated much of 2020, upending people’s savings strategies and causing a great deal of “pension panic” amongst those approaching retirement. Britons enjoyed little respite in 2021, with the capping of the lifetime allowance, the temporary freezing of the UK’s state pension triple lock, and uncertainty surrounding pension tax relief.

Evidently, there has been a great deal of turbulence for pension planners. So, how exactly has this impacted their confidence for the future?

Pension uncertainty

Given the chaotic backdrop, it is hardly surprising to see Britons’ pension confidence beginning to falter.

Indeed, My Pension Expert’s recent survey of more than 1,200 UK adults aged 40 and over found that an overwhelming majority (87%) of respondents have no confidence in the Government’s handling of pension policy. Meanwhile, almost two fifths (37%) felt that the temporary suspension of the state pension triple lock would impact their retirement finances, whilst over a sixth (18%) felt that uncertainty surrounding pension tax relief was negatively impacting people’s retirement strategies.
Such figures are concerning. They suggest that recent changes and rumours surrounding overhauls to pension policy are causing panic amongst savers. And, as My Pension Expert has asserted on numerous occasions, panic can lead to rash, ill-advised decisions, which can inflict financial harm later down the line.

Needless to say, this is not an ideal outcome for anyone. As such, appropriate action must be taken to help savers make informed decisions about their retirement finances.

A call to action

Of course, some of the onus must lie on the Government and industry bodies to work together to address the problems within existing policies, and the industry itself. Indeed, My Pension Expert’s aforementioned research found that 64% of respondents felt that simplifying the UK’s pension system would benefit those saving for retirement.

That said, we must acknowledge that such changes will take time to develop and carefully implement. But savers needn’t feel that they must muddle their way through pension system complexities alone while waiting for change. Instead, they would be wise to seek independent financial advice.

Indeed, independent financial advisers, like our brilliant team at My Pension Expert, can explain how policy and regulatory changes will impact an individual’s retirement strategy. What’s more, they will conduct a thorough review of their existing financial situation and make tailored recommendations to change a strategy to suit their specific needs. My Pension Expert’s advisers also go a step further and conduct annual reviews of clients’ retirement plans. So, if any further policy changes are announced, savers can rest assured that a financially secure retirement is well within reach.

After a turbulent year for pensions, it is unsurprising that savers’ confidence has declined. However, they needn’t be alarmed. Instead, savers would be wise to seek independent financial advice to understand how pension policy changes might impact their plans and how they can adjust their strategy accordingly. Doing so will certainly help Britons to save for their retirement with confidence.