Saving makes you feel good – it’s official

Happy couple laughing in the sun because saving makes you feel good

Savings

MoneyPlus Features Team

8th December 2015 at 4:44pm

Fancy a confidence boost? Then regular saving could be the key according to a recent survey from AXA Life.

It’s claimed that actively saving for retirement generates confidence and creates a positive psychological impact, regardless of the amount being saved. And going by the results of the firm’s Retirement Confidence Index 2015, the most confident UK adults are those approaching retirement age.

Surprising results

The firm recently conducted an online study of more than 1,000 non-retired UK adults who are over 50, basing their conclusions on a series of financial and non-traditional metrics proven to influence retirement confidence. And the research shows, it doesn’t matter how much you earn – but it does matter how much you save.

These findings will come as welcome news to those who may not be in the higher earning spectrum. They can take heart in the fact that the wealthiest people in the UK are not necessarily the most confident in, or prepared for, their future retirement, because when that income stream switches off, they’ll be in the same boat as everyone else.

Confidence levels on the up

On average, higher income earners are only six percentage points higher in terms of retirement confidence than middle-income earners, at 62 per cent compared to 56 per cent confident, respectively.

They factored in two sectors, ‘confidents’ and ‘champions’. Champions are defined as confident now and increasing in confidence over the past year, while confidents are defined as confident now, with no change in confidence over the past year.

Almost half of those with a household income of £30,000 to £40,000 are defined as ‘confidents’ or ‘champions’. And this proportion rises to 58 per cent for those with a household income of £50,000-£60,000 a year.

And overall, a current household income of £39,091 a year appears to be the ‘tipping point’ for retirement confidence.

The feel-good factor

So going by these results it would appear saving is actually good for you. Actively saving for retirement generates confidence and creates a positive psychological impact, with confidence levels rising dramatically the more you save.

Only 24 per cent of people who do not save at all can be classed as ‘confidents’ or ‘champions’ when it comes to retirement confidence, but this rises to 37 per cent for those who save £100-£300, 53 per cent for £300-£500 and 57 per cent for over savings of over £500 a month.

So what is the leading driver of retirement confidence?

Well it would appear that forward planning is the key though non-financial factors were also important. The emotional drivers of fulfilment and quality of life constituted a quarter of retirement confidence, the firm said.

Getting the right advice seems to play its part too in fuelling the confidence levels. 75 per cent of non-retired adults said that financial advice had played a crucial role in their plans for a comfortable retirement.

By contrast, only 45 per cent of people who did not receive advice said they expected to get a comfortable retirement.

Save like a champion

So it looks like if you want to feel good, get the endorphins racing and your confidence levels at a high, then get actively saving – funding your retirement feels good.

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The information in this blog or any response to comments should not be regarded as financial advice and is based on our understanding in December 2015.