Retirement optimism in the UK is slowly increasing, but there is still a long way to go, as over half (52 per cent) of Brits are not optimistic about being prepared for retirement, research from State Street Global Advisers has revealed.

The survey showed that there have been improvements, with one in five (20 per cent) people stating that they are optimistic that they will be financially prepared for retirement by the time they plan to stop working, up 6 per cent from 2023.

In addition to this, the research showed that the same proportion (20 per cent) are confident about being able to retire when planned (up 7 per cent from 2023).

However, it found that concerns persist for most savers, as 50 per cent are not confident they will be able to retire when planned.

In addition to this, 30 per cent said their outlook on when and how they might retire has changed, with the top factors negatively affecting confidence including inflation and increased cost of living, the economy, and the political climate.

However, the top concerns for UK savers when it comes to retirement were the lack of certainty on the level of savings they will need (66 per cent), not having the ability to generate a consistent income throughout retirement (62 per cent), and outliving their savings (54 per cent).

Given these affordability concerns, it is perhaps unsurprising that nearly two-thirds (65 per cent) of UK respondents would like their retirement savings invested in a way that maximises returns, regardless of where it is invested.

However, this wasn’t the case for everyone, as 31 per cent said they would like their retirement savings to be invested in their local area.

Furthermore, 30 per cent would like their retirement savings invested partially in the UK economy to boost economic activity, even if it means lower overall returns, whilst nearly a quarter (24 per cent) said they would save more into their pension if they knew it was being invested in the UK.

The research also highlighted differences between UK savers and those around the world, revealing that UK savers are less likely to work with an independent or employer-sponsored financial adviser compared to savers in other countries.

According to the research, only 21 per cent of UK savers worked with an independent financial adviser (IFA), compared to 28 per cent of savers in Australia, Ireland (36 per cent), Canada (27 per cent) and in the US (38 per cent).

High fees were the most common reason not to go to a financial adviser, cited by 44 per cent of UK savers, whilst 43 per cent felt that they were confident they would be able to manage their finances and investments on their own.

But this approach may not be working, as 42 per cent of Brits said they don't know what they plan to do with their retirement savings when they retire, which is a much higher figure than those in the US (22 per cent), Ireland (24 per cent), Australia (27 per cent) and Canada (35 per cent).

Commenting on the findings, State Street Global Advisors head of retirement strategy, Alistair Byrne, said: “These findings present a mixed picture. It’s clear that some of the challenging dynamics in the UK retirement landscape persist.

"The majority of UK savers do not feel confident about their retirement, and that there is a clear lack of understanding on how much is needed to live their desired lifestyle.

"As the needs of pension savers evolve, the support, education, and structure of the UK’s retirement system must continue to evolve too — otherwise, we risk a generation of workers being left behind."

“With that said, there are some positives in the research. Increasingly, pension savers are conscious of how their funds work for them and how they’re invested by managers – for example, we see support from many UK savers for their money to be invested locally, a specific provision of the government’s Pension Investment Review.

"Work is underway to ensure that the UK’s retirement system supports hard-working savers through to retirement, and it’s vital that these needs are heard and prioritised.”

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