Britons are surprisingly optimistic about the retirement they want, but far less confident about their ability to pay for it, new research from PensionBee reveals.
More than half of UK adults (56%) say they feel hopeful or excited about retirement. Most can picture what they want their later years to look like, with more time with family (59%), travelling (55%) and simply resting (51%) among the most popular ambitions.
Yet this emotional optimism is rarely matched by financial certainty. Just 16% have both worked out how much they will need and feel confident they’re on track to reach their retirement goals. More than a third (38%) have no idea how much their desired retirement will cost. 18% say they are confident they’ll achieve their retirement goals despite having no idea what those goals will cost.
Optimism meets an uncomfortable price tag
Part of the problem is that many people appear to be underestimating the cost of the retirement they want. More than three quarters (77%) put the annual cost of a comfortable retirement below the £45,400 benchmark set by Pensions UK for a single person. Nearly half (47%) estimate it would cost £30,000 a year or less. That is at least £15,400 below the comfortable benchmark, and even below the £32,700 Pensions UK defines as a moderate retirement – a standard that includes an annual overseas holiday and eating out a couple of times a month.
This is a substantial gap because the State Pension only covers part of the cost. The full new State Pension is worth £12,548 a year in 2026/27, leaving £32,852 a year to be funded from other income and savings for anyone targeting a comfortable retirement. Pensions UK estimates that currently only around 9% of the working population is currently on track to reach that standard.
The confidence gap isn’t simply about apathy
The findings suggest that a lack of financial preparation isn’t always a lack of motivation. Among the 39% who feel they’ve left retirement planning too late, affordability is the biggest barrier. Nearly a third (32%) say they couldn’t afford to engage with their pension sooner. That is twice the proportion who say they didn’t know where to start (16%) and nearly three times the proportion who found pensions too complicated (12%).
The financial pressure facing households helps explain why. Recent ONS data found that 35% of adults think they would be unable to save any money at all over the next 12 months, while 56% say their cost of living has risen in the past month.
The Pensions Commission has also warned that millions of working-age adults are not saving enough for retirement, showing that the gap between retirement aspirations and financial preparedness is not simply a question of individual behaviour.
Every generation feels the gap differently
The confidence gap also looks different across generations. Gen Z are the most likely to feel anxious or overwhelmed by retirement, with 42% saying they feel this way or try not to think about it, including 17% who avoid the subject altogether.
At the other end of the spectrum, Gen X are the most likely generation to feel they have left retirement planning too late, at 48%. Across all age groups, 43% of adults say they did not seriously think about their pension until they were 36 or older, while for one in four (26%), nothing has yet made retirement feel real.
Maike Currie, VP Personal Finance at PensionBee, said: “Britons aren’t short of retirement dreams. What they’re short of is confidence that their finances will make those dreams a reality. That’s the irony in these findings. People are far more certain about the retirement they want than they are about their ability to pay for it.
“For plenty of people, the barrier is money, not motivation. No amount of encouragement can fix a month that doesn’t balance. When the choice feels like paying today’s bills or funding a retirement decades away, today will win.
“But financial confidence can be built. For people who are in a position to take action, the first steps don’t need to be complicated. A retirement calculator can help put a rough price on the future they want. Finding out what they already have and bringing old pensions together can give them a clearer picture of where they stand. Turning a distant hope into something tangible that you can put a number on is a powerful first step. Once you know what you’re aiming for, you can start making a plan to get there.”
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