A stark warning has been issued to retirees who depend entirely on the Department for Work and Pensions (DWP) state pension, following a significant drop in public confidence after the Autumn Budget.
Sharp Drop in Saver Confidence
A new survey from digital workplace pension provider Penfold has exposed deep anxiety among UK savers regarding their financial futures. The poll of 340 respondents found that a striking 72 per cent feel the current Labour Party government is failing to adequately support people preparing for retirement.
This sentiment marks a clear erosion of trust, with 58.5 per cent of those surveyed stating they felt less confident about their financial prospects following the Chancellor's recent announcements. The findings point to a climate of uncertainty, driven largely by fears over future changes to retirement rules.
Key Drivers of Pension Anxiety
The research highlights several specific concerns that are unsettling savers across the country. Chief among these are worries about a rising state pension age, constantly shifting regulations, and a fundamental fear that the state pension may not exist in its current form when today's workers retire.
Policy announcements in the Budget have directly fuelled this uncertainty. Plans to cap National Insurance (NI) relief on salary sacrifice arrangements from 2029, coupled with the creation of a new state pension commission, have left many questioning the long-term stability of the system.
This hesitancy is having a tangible impact on decision-making. More than a third (36.3 per cent) of respondents admitted they are now unsure whether to increase or reduce their monthly pension contributions—a level of indecision that Penfold warns is "disruptive" to effective long-term planning.
Expert Warns Against Sole Reliance on State Pension
Chris Eastwood, CEO and co-founder of Penfold, commented on the alarming data. "When more than a third of savers can’t decide whether to increase or reduce their pension contributions, it’s a clear signal that confidence has been disrupted," he stated.
He emphasised that pension saving relies on stability, which is currently in short supply. "Sudden changes make it harder for people to plan and harder for the public to trust the system," Eastwood added.
He was particularly critical of the upcoming cap on salary sacrifice NI relief, labelling it "a backward step for boosting pension saving." The move to revisit the state pension via a new commission, he argued, signals the current system is "under pressure" and likely to change.
His conclusion was a direct warning to the public: "For today’s savers, it reinforces a simple truth: relying on the state pension alone won’t deliver the retirement most people hope for." He cautioned that if contributions fall or planning is delayed, millions could face a far less secure retirement than they anticipate.
Eastwood's final assessment was that the Autumn Budget "highlights why private pension planning has never been more important, and why uncertainty must be addressed immediately."
