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The Longer Lives Index: a crisis of confidence

Action is needed to prevent millions of people in the UK from slipping into financial insecurity in later life.

With savings dented by the pandemic and cost-of-living crisis looming, these financial pressures can be avoided if governments act now to support citizens of all ages.

Can 40 years of working pay for 30 years of retirement?

A Crisis of Confidence, the latest report from Phoenix Insights, was built around data spanning five critical areas for living longer: saving, health, work, housing, and family support.

The results are cause for concern. Indeed, nearly half the population is not confident about their ability to save enough for retirement, largely due to money pressures elsewhere.

Furthermore, as many as 18 million people in the UK are not adequately financially prepared for later life, and may be forced to mark their retirement by selling their homes, slashing their children’s inheritance, and relying on state support.

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These findings come at a difficult time for personal finances. With 12 million people already emerging from the COVID-19 pandemic with weakened financial security, as many as 41% expect to use some or all of their savings to navigate the fresh cost-of-living crisis – while 14% admit having no savings to use at all.

The impact of current rising inflation from increased energy tariffs, as well as higher national insurance contributions from April, will mean 27% will save less money for the future. Of the people worried about their future finances, two in five said they simply cannot afford to put enough regular money aside, and one in five said that paying off debts was preventing them from saving in the first place.

Saving for retirement can require effort at the best of times. For millions, the conditions have never been tougher.

When it comes to pensions and retirement, we are still living with a 20th century model in a 21st century world. Due to awe-inspiring developments in science and healthcare in recent decades alone, children born today have a good chance of living to 100.

However, most of us still believe we will retire at or before state pension age – meaning we expect to spend one third of our lives out to pasture. In our modern world, can thirty years of retirement be sustained by forty years of working and saving?

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While the forecast may be gloomy, there are actions we can take now that could save millions from uncertain futures.

Phoenix Insights is calling on the government and employers to initiate a range of new measures, such as investing in mid-life retraining, supporting age-inclusive workplaces, bolstering access to pension advice at a younger age, expanding auto-enrolment to the self-employed, and strengthening rights for renters.

While those at the top may be faced with all manner of other pressures and priorities, we need to act now to support people to save more and to stay in the workforce if they need to.

Watch our webinar

Watch our expert panel explore this new data, and discuss the big ideas and implications of what this means for individuals, employers, businesses and policy makers shaping the future of our longer lives.

The event is chaired by Politico’s UK Policy Editor, Matt Honeycombe-Foster.

Joined by:

  • Catherine Foot, Director of Phoenix Insights
  • Carolyn Jones, Head of Money and Pensions Policy and Strategy at the Money and Pensions Service
  • Andrew Harrop, General Secretary at The Fabian Society
  • Lord Victor Adebowale, Co-founder of Visionable and Phoenix Insights Advisory Committee Member
  • Tony Wilson, Director at Institute for Employment Studies
  • Kalina Kasprzyk, Frontier Economics

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Explore our data hub

Use the data hub to explore how confident different sections of the UK population are in their plans for retirement. You can look across each of the five dimensions we have explored: savings; housing; health; financial support between family and friends; and work. And you can filter the data according to multiple different demographic characteristics.