Over three quarters (77%) of UK homeowners over the age of 40 are confident about their current financial situation despite the pandemic’s impact on personal finances, according to new research from Canada Life.

However, when looking further ahead, the study suggested that over-40s are less positive about their retirement prospects, with Canada Life revealing that 16% don’t feel they will have enough pension savings to fund their plans, such as paying for their current lifestyle through retirement.

The research, based on findings among 1,020 UK homeowners over the age of 40, suggested that an increase in savings is driving confidence. Over the last 12 months, 42% of UK homeowners over 40 have saved more during the pandemic, saving an average £2,570 more this year.

Canada Life revealed that those in the South East have saved the most at an average of £3,150, while those in the East of England have saved the least, at £1,915. By contrast, around 16% of respondents said they have saved less, with an average reduction of £1,550 this past year.

“COVID-19 has divided the nation when it comes to personal finances,” commented Canada Life head of marketing, insurance, Alice Watson.

“Our research shows that many have been fortunate enough to have saved more this year, thanks to lower travel costs and fewer holidays. However, others have been facing financial difficulties, as many people navigate furlough or unemployment.

“It’s encouraging to see so many people remain confident about their current financial situation. However, there is clearly a shift in confidence when it comes to retirement planning. This is where property wealth will play an increasingly important role, as people may be unable to rely solely on their pension income.”

Canada Life’s findings also suggested that while there is confidence around homeowners’ current financial situations, this is not replicated when it comes to saving for retirement.

The study found that 21% of homeowners don’t feel they will have enough to fund their aspirations, such as home improvements, a holiday or car, and 31% don’t think they will have enough pension savings to fund their dreams such as regular holidays or a second property.

Watson added: “While saving for retirement may seem like a daunting task, considering how different types of wealth can be used during retirement is crucial.

“Speaking with a financial adviser is a sensible first step, as they can demonstrate how property wealth could be used to meet the needs of homeowners nearing retirement, helping them to reach their retirement goals.”

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