Retirement confidence in the UK has dropped to its lowest level since tracking began, according to new research from Nucleus.
The third annual Nucleus UK Retirement Confidence Index finds that only one in four adults (26%) are confident they will have enough money to live comfortably for the rest of their lives, down from 34% last year.
The overall confidence score has fallen to 4.2 out of 10, compared with 4.6 in 2024 and 6.9 in 2023.
The report, based on YouGov research of 4,359 UK adults, links the decline to cost-of-living pressures, low financial literacy and continued speculation about policy changes ahead of the Budget.
Confidence is lowest among those aged 45–54 (score of 3.2) and 35–44 (3.4), reflecting the cohort least likely to have defined benefit pensions and who joined auto-enrolment later in their careers.
However, confidence is much higher among people who receive advice. UK adults who work with a professional financial adviser report an average score of 5.5, compared with the national average of 4.2.
The gender confidence gap has widened again. Men record a score of 4.6, compared with 3.8 for women.
Almost half of women (45%) say they are not currently contributing to a pension, compared with 40% of men. While workplace pension participation is broadly level, women are far less likely to have other forms of savings.
Andrew Tully, technical services director at Nucleus, said: “Women are saving less, have fewer financial products and are less confident about their long-term prospects.
“We need more targeted communication, flexibility in saving options and a concerted effort to make financial planning more inclusive so women are not left behind.”
The report also highlights the impact of day-to-day financial pressures. Forty-three per cent of adults are not contributing to a pension, with the rising cost of living the most common reason.
Mortgage or rent payments (24%) and debt repayments (16%) are also key barriers.
Where contributions are being made, the most common level is between 5% and 10% of income, broadly aligned with auto-enrolment minimums and below the level needed for a comfortable retirement.
Education is a major factor. Sixty-eight per cent say they would feel more confident if they had learned about pensions, investing and financial planning earlier in life. Forty-two per cent believe retirement planning should begin in their twenties.
Those who take paid-for financial advice score 5.5, compared with 4.4 among those relying on free guidance and 4.9 for self-directed planners.
Tully added: “Financial education needs to start early. Empowering people to understand pensions, investment and tax from a young age would make an enormous difference to future confidence.”
Policy speculation is also fuelling anxiety. Fifty-nine per cent are concerned about potential cuts to tax-free pension lump sums, while 44% worry about pensions coming into scope for inheritance tax from April 2027.
Only 16% believe the new Independent Pensions Commission will make a positive difference.
The state pension is another area of concern. More than half of adults (54%) believe it will not exist in its current form within ten years, and a quarter think it may disappear entirely.
Almost half (44%) incorrectly believe National Insurance contributions are saved into a personal pot.
Tully warned: “The state pension remains the cornerstone of retirement income for millions, yet confidence in its future is collapsing. Without clarity and consistency people cannot plan.”
The report concludes that confidence will not recover until pensions policy is stabilised and removed from short-term political cycles.
Tully added: “We are seeing a deep erosion of trust in the retirement system. Constant tinkering with pension rules makes long-term planning feel pointless. Confidence will not return until people believe the rules will remain stable.”