Financial confidence plummets among UK’s older generation

There has been a significant rise in the number of people not feeling confident about their finances for the future, research by the Equity Release Council has highlighted.

The Council’s latest research revealed that 46% of UK adults are not confident about their financial future, a figure up from 35% in 2021.

According to the trade association’s Home Advantage study, which explored 5,000 UK adults’ financial attitudes and experiences including the role of property as a foundation of financial security, 57% of UK adults said their financial situation has got worse over the last year, with only 14% feeling their finances have improved.

Older age groups have been hit the hardest by this loss in confidence, the study suggested, with people aged 65 to 74 the worst impacted. Fewer than one in five (18%) lacked confidence about their future finances in 2021, a percentage that has since soared to 39%.

The 55 to 64 age group and those aged 75 and over have also experienced a more drastic loss of confidence since 2021, compared with the national average. The Council’s study showed that the percentage of adults aged 55 to 64 who are lacking confidence about their future finances has jumped from 37% to 51%, while almost one in four people aged 75 and over feel the same (23%), up from 11%.

CEO at the Equity Release Council, Jim Boyd, commented: “The deterioration of confidence in our future finances since the COVID pandemic is shocking, particularly among those about to retire. More people are having to make hard choices which will potentially have a long-term impact on their financial security.

“Mortgage repayment pressures mean many households are planning to use their pensions to pay off mortgage debt, possibly at the expense of a comfortable retirement. While others are struggling to pay these higher mortgage costs during their working lives which is limiting the amount they can save into their pension.

“Although many hope to retire debt-free with a healthy pension pot, we mustn’t forget the millions who can’t save or pay down their mortgages and encourage them to consider all their options including property wealth.”

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