Levels of confidence in retirement saving remain persistently low, with feelings dampened further by Covid-19, but savers recognise the current opportunities in equities, a State Street Global Advisors (SSGA) survey finds.
Over half (51%) of 1,000 defined contribution (DC) savers said they were not optimistic about their retirement and, of those, 23% said they were not optimistic at all.
Nearly one in five (18%) said the economic fallout from the coronavirus pandemic has had a high impact on their retirement confidence, but they also blamed a lack of spare money to save, uncertainty around retirement plans, and the complexity of the pensions system.
However, savers did understand the importance of continued retirement saving, and 80% of scheme members had not taken any action to adjust retirement plan in light of the pandemic. Meanwhile, 13% said they were checking their balances more often.
The majority (60%) also rebuked any suggestion that employers should pause pension contributions to shore up wider finances, and 59% said "now is a good time to buy into the stock market for the long term". Nevertheless, the same proportion said they would prefer lower returns if it meant less chance of loss.
Head of pensions and retirement strategy Alistair Byrne said: "The Covid-19 pandemic is affecting many people's short-term finances, but we've not yet seen a significant impact on retirement saving behaviour. Few people have stopped saving and, surprisingly, more savers saw the market turmoil as a potential buying opportunity than a time to sell.
"That said, over 50% of people are not confident in their retirement prospects, and 18% say that Covid-19 has had an impact, and that may increase as the furlough scheme comes to an end and layoffs increase. For those whose jobs do remain secure, we need to continue to stress the benefits of staying the course, continuing to save into well-governed default funds in their workplace DC scheme to improve retirement outcomes."
The survey, conducted by YouGov between 4 May and 20 May, also found only 7% of savers had reduced or stopped their pension contributions, below the global average of 13%. This is despite 31% saying they felt they worse off financially compared with before the outbreak, with 24% of the sample having been furloughed.
SSGA head of UK institutional Jenny Yoe added: "It's obvious that the Covid-19 pandemic has had a seismic effect on peoples' financial situations.
"Employers and savers should not lose track of the long-term picture and they must take steps to keep up with their pension contributions, even in these uncertain times.
"Decisive ongoing action is necessary to improve the persistently low levels of retirement planning confidence in the UK and lay the groundwork for the next generation to retire securely."
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