Just under half (44%) of Brits aged 18-24 are hopeful they could have a better retirement than their parents but worry about how they will afford it, research from Financial Services Compensation Services (FSCS) shows.
The firm, which surveyed over 2,000 UK pre-retired adults aged between 18–65, also found that 24% of the 18-24 group feel their later life plans will be worse than their parents.
The survey also shows that 35-44-year-olds are the least optimistic. Only three-in-10 (30%) believe their retirement will be better than their parents’, compared to 35% who believe it will be worse.
Of those who believe their retirement will be better than their parents, quality of lifestyle, physical and mental health, and the ability to travel are the top factors for this.
However, many respondents voiced concerns about how they will afford their retirement lifestyle. Some 40% of future retirees believe their ability to fund their retirement will be worse compared to their parents and almost half of respondents (48%) believe the possibility of retiring early is low.
The study also found that economic setbacks, such as the cost-of-living crisis and housing costs, are the key reasons why young people believe they cannot sustainably fund their retirement. Over half of UK adults (56%) fear that their standard of living will decline during retirement. Almost half (47%) worry about how they will afford housing costs into their retirement.
Despite these concerns, FSCS concludes that low levels of awareness around planning retirement partly explain these figures. When participants were asked about saving for retirement, a quarter (25%) of UK working adults aged 18-65 had a lack of understanding about pensions.
Overall, only 37% of pre-retirement Brits feel confident about planning for their later life.
Lila Pleban, chief communications officer at FSCS, said: “It’s encouraging to see the optimism in future UK retirees, but it’s unsurprising that many are also concerned when it comes to their ability to fund their retirement dreams. The UK’s current economic climate, including the rising cost of living and housing costs, is a source of concern for those making any major financial decision.
“It’s clear from our research that those thinking about, or approaching, retirement must have access to the knowledge and tools they need so they can choose their products wisely as they try to bridge the gap between the retirement they expect and their concerns about how they will fund it.”
