The index has been compiled by adviser platform group Nucleus Financial Platforms.

It’s based on responses to the question of how confident those approaching or in retirement feel about having enough money to live on for the rest of their lives.

It produced the result that the confidence index is 6.9 out of 10, with a negative outlook. But crucially the research revealed that Financial Planning significantly helps drive confidence about retirement among consumers.

Just over half of respondents (51%) had a detailed plan for retirement, although only 20% had their plan in writing. That didn’t really affect people’s confidence which was a score of 8.1 for those with a detailed plan compared to 8.0 for the 20% without a written plan.

Those without a detailed plan had the lowest confidence score at 4.6. The results indicate that Planning is a key driver to people feeling positive about securing a rewarding retirement, according to Nucleus.

Richard Rowney, chief executive at Nucleus, said: “We need to understand how people at this stage of life feel and what influences their decisions. We firmly believe in the value of Planning and advice, which is why we’ve invested in this study. We set out to learn more about how we can help people live fulfilling lives in retirement, and how we and others in the industry might address potential issues getting in the way.” 

The research also showed that people who have drawn on their pension savings report higher levels of retirement confidence than those who have not, regardless of whether they have taken advice. Those who have received advice and accessed their savings scored 7.2, compared to 6.6 for those who hadn’t accessed their pension funds. Non-advised participants who’ve accessed their pension pots scored a confidence rating of 7.3 compared.

Andrew Tully, technical services director at Nucleus said: “The stand-out piece of data for me is that advice itself does not necessarily lead to more confidence, but Planning absolutely does. What that tells me is that we should all perhaps be looking at the advice gap from a different angle.

“If we focus on taking actions that lead people to engaging with the Planning process, advice and implementation of products, if required, will naturally follow. That for me is a new way of looking at the problem of engagement.”

2023 UK Retirement Index: 14 things the sector should do, according to Nucleus

Platforms and other providers:

• Make the pensions dashboard work: the quality of data is key to empowering customers to act and make informed choices.

• Free movement of pension funds: yes, we need checks and protection from foreseeable harms, but they should be proportionate to the likely level of risk.

• Better consumer communication: clear, concise, and standardised plan information that anyone can understand, with easier access to information. There may also be some who recognise a need to act but simply don’t know how to. One solution is to make the steps towards guidance and advice much clearer.

• Championing financial advice: commit to seeing through necessary service and technology developments, easing the advice process, and making professionals’ lives simpler. The benefits of planning and advice can be life changing – but these must be promoted if they are to help shift the dial on advice take-up.

Advisers:

• Clear communication of services and costs: with so many variants of financial advice services, consumers cannot be expected to know the difference.

• Embrace Planning: it’s clearly vital to retirement confidence for consumers and holistic planning isn’t always part of the financial advice process. It needs to be.

Regulators:

• Highlight the benefits of regulated advice: and the dangers of not seeking it.

• Prioritising the real risks: more focus on the immediate dangers and bad players, with more effective use of resources. Don’t let the desire for a perfect outcome get in the way of a good customer outcome.

• Target social media: tough regulation, targeting the ‘finfluencers’ with heavy penalties.

Government:

• Make a plan to increase pension saving: most experts accept an 8% auto-enrolment contribution isn’t sufficient. We should aim for contributions to start gradually increasing before 2027, fifteen years after the introduction of auto enrolment.

• Make the pensions dashboard happen: make it soon and make it effective. This will simplify and speed up the process of finding and consolidating pension funds. The same point stands for a solution to the small pots problem.

• Clear, effective, and accessible communication and education: about the need for retirement planning and the risks of not doing so.

• Funding and promoting financial education in schools: We need to normalise saving into a pension from as early an age as possible.

• Stop the pension legislation merry-go-round: pensions are a long-term arrangement, and the legislative process should reflect that. Setting up an ongoing Independent Pensions Commission to develop long-term proposals for pensions and savings policy would bring much-needed consistency.

Nucleus's consumer research was carried out online by YouGov between 10 and 16 August 2023. The sample consisted of 2,208 UK adults aged 50 and over and who have pension pots or pension entitlements other than the State Pension.