Is your retirement glass half empty or half full? New research1 from Canada Life reveals that age has everything to do with it.
Younger people (18–34-year-olds) optimistically are expecting to retire by 60 (on average), despite the state pension not kicking in until at least eight years later. Conversely, those aged 55 or over, don’t expect to retire until they are 66, much closer to the current state pension age.
Similarly, expectations around how much is needed to fund a comfortable retirement differs by generation. In today’s money, Millennials and Gen Z2 believe they will need on average £35,000 per year when they retire, whereas those aged 55 and over believe they will need £25,000 a year to live comfortably.
Despite those aged 55 and over anticipating the need for a more moderate retirement pot, they are less confident that they will have enough saved than the younger generations. More than half (53%) of 18-34-year-olds are confident they will be able to save enough by the time they retire whereas less than four in 10 (39%) 55+ year olds feel the same way. These doubts may be well-founded, with one in five (19%) over 55s still having no plans at all for their retirement.
Funding retirement also differs by age, with those closer to retirement much more likely to expect to rely on state pension (72% of 55+) compared to younger groups (27% of 18-34). Alternatively, the younger group expect workplace pensions (33%), savings and cash ISAs (32%) and investments (24%) to fuel their retirement pot. An entrepreneurial 14% Brits will use a side hustle to help with funding, again rising to 19% of 18-34s.
Tom Evans, MD of Retirement, Canada Life says:
“It makes sense that attitudes to retirement will differ depending on age and generation. Underlying optimism of Millennials and Gen Z may be in part due to the introduction of auto-enrolment, and potentially an expectation of inheritance.
“Whilst there is nothing wrong with aspiring towards an earlier or a more extravagant retirement, it’s important not to lull into a false sense of security.
“No matter whether you’re a Boomer, Millennial, Gen Z or otherwise, remember that it’s never too early or too late to start planning. The government portal has a useful State Pension calculator as a starter. A professional financial adviser could also be a key port of call, helping you to plan and ultimately feel empowered about your financial future.”
ENDS
Enquiries:
Press enquiries should be directed to:
Elle McAtamney, Canada Life, 07913 568213, elle.mcatamney@canadalife.co.uk
Notes to editors:
- The research was commissioned by Canada Life and conducted by Opinium, with a nationally representative sample of 2000 UK adults, between 22.08.23 – 25.08.23.
- Generations that account for those in the 18-34 year old bracket.
About Canada Life:
Canada Life is part of a group of companies controlled by Great-West Lifeco Inc., a diversified financial services holding company headquartered in Winnipeg, Canada. Through its subsidiary companies, Lifeco has operations in Canada, the United States, and Europe. Great-West Lifeco and its insurance subsidiaries have received strong ratings from major rating agencies. Great-West Lifeco has over 38 million customers worldwide and £1.532trillion assets under administration (as at 31 December 2022).
Canada Life Limited began operations in the United Kingdom in 1903 and looks after the retirement, investment and protection needs of individuals and companies alike. As well as providing stability and security through its individual contracts, Canada Life Limited has grown to become the leading provider of competitively priced group insurance solutions. Canada Life acquired Retirement Advantage on 3rd January 2018 for an undisclosed sum. The acquisition added over 30,000 retirement income and equity release customers and more than £2 billion of assets under management including a £1.5 billion block of in-force annuities to Canada Life.
Canada Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Canada Life International Limited and CLI Institutional Limited are Isle of Man registered companies authorised and regulated by the Isle of Man Financial Services Authority. Canada Life International Assurance Limited and Canada Life International Assurance (Ireland) DAC are authorised and regulated by the Central Bank of Ireland.