Lack of confidence in retirement income grows

A survey by independent financial research company Defaqto has found a growing lack of confidence among consumers that their retirement income will meet their needs.

Of the 1,000 consumers surveyed:

44% were not confident that their needs would be met in retirement - in 2009, Defaqto found that 38% of people lacked confidence

Only 11% were very confident that their retirement income will need their needs, which has dropped from 16% of consumers in 2009

At the same time, Defaqto's survey indicates that:

Most people (61%) believe they will have to rely on the state pension to provide their retirement income - however, this has fallen from 74% in 2009

There is a greater expectation that people will have to rely on their own personal pension income, with the proportion increasing from 17% in 2009 to 30% this year

Employer pension schemes remain the second most important source of retirement income, with 44% of respondents seeing it as the source they expect to rely on

Matthew Ward, Defaqto's Wealth Management Consultant, said: "It is clear that the people's lack of confidence in their retirement prospects is increasing.  This is unsurprising given the current economic climate and financial uncertainty that we are all faced with.  It is interesting and concerning that a significant number of people expect to rely on the state to provide their income in retirement.  However, at the same time, there seems to be a growing awareness that people need to make their own arrangements if they are to have sufficient income in retirement.

"It is important for people to think about their retirement and to plan for old age as early as possible.  However, retirement planning is a complex area and people should consider seeking advice."

Consumers can visit Defaqto's website for information to help them understand pensions: defaqto.com/pensions.