Almost a fifth (18 per cent) of defined contribution (DC) pension savers say that Covid-19 has had a high impact on their retirement confidence, according to State Street Global Advisors (SSGA).

A survey from the firm found that confidence in retirement saving remained “persistently low”, with just over half (51 per cent) of respondents stating that they were not optimistic about their retirement, compared to 53 per cent in 2018.

Of these respondents, 23 per cent said they are not optimistic at all, a rise of 2 per cent when compared to 2018.

SSGA commented that this poor confidence could also be attributable to other long-running factors, such as lacking spare money to save, uncertainty surrounding pension plans and pension system complexity.

More than two-fifths (42 per cent) of respondents felt that the pandemic would impact their finances for between a few months and up to a year, 18 per cent said it would not have an impact and 16 per cent said they didn’t know.

Almost a third (31 per cent) of DC pension savers thought they were worse off financially since the outbreak of the pandemic and 8 per cent said they were a lot worse off, although SSGA warned that this could change after furlough schemes end.

However, nearly three-fifths (59 per cent) said that they thought the volatility presented by the pandemic was an opportunity to invest in the stock market for the long term.

SSGA head of pensions and retirement strategy, Alistair Byrne, commented: “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.”

Four-fifths (80 per cent) of scheme members had not taken any action to adjust their retirement plan in light of the pandemic, while 13 per cent said they were checking balances more often and might need reassurance.

Nearly two-thirds (60 per cent) of respondents said they would not want their employer to pause pension contributions in order to shore up company finances.

SSGA head of UK institutional, Jenny Yoe, said: “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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