Regular saving, not income, is the key driver of confidence in retirement

Transcription

1 Wednesday 18 November 2015 Regular saving, not income, is the key driver of confidence in retirement AXA Life Invest study finds that people on low to middle incomes are just as likely as the wealthy to be confident in future retirement Regular saving no matter what the level creates a positive psychological impact The AXA Life Invest Retirement Confidence Index 2015 has found that the wealthiest people in the UK are not necessarily the most confident in their future retirement, with confidence tipping only slightly in favour of higher incomes. Instead, actively saving for retirement generates confidence and creates a positive psychological impact, regardless of the amount being saved. People who save towards retirement reap rewards, suggesting that saving is good for you. The Index identifies the most confident UK adults who are approaching retirement age, based on a series of financial and non-traditional metrics proven to influence retirement confidence. It is based upon an online study of over 1,000 non-retired UK adults who are over 50 years old. The happy middle On average, higher income earners are only six percentage points higher in terms of retirement confidence than middle income earners, at 62% compared to 56% confident, respectively. Almost half of those with a household income of 30,000-40,000 are defined as Confidents or Champions. 1 This proportion rises to 58% for those with a household income of 50,000-60,000 a year. Overall a household income of 39,091 a year appears to be the tipping point for retirement confidence. Meanwhile confidence levels rise dramatically the more you save: only 24% 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% for those who save , 53% for , and 57% for over savings of over 500 a month. A moderately confident nation More generally, the Index found that about half of those approaching retirement are confident about their future retirement, but that only 5% fall into the category of Champions. The Index identified that forward planning was the leading driver of retirement confidence, though non-financial factors were 1 Champions are defined as confident now and increasing in, while confidents are defined as confident now, with no change in. 1

2 also important. The emotional drivers of fulfilment and quality of life constituted a quarter of retirement confidence. Simon Smallcombe, Managing Director of AXA Life Invest, said: Contrary to what you would expect, wealth in and of itself is not the key driver of confidence in your future retirement. Instead regular and active saving is more important. The commonly-held belief that the wealthiest in society are the most secure simply doesn t stand up under scrutiny, according to our Index. This suggests that those who plan for the future and squirrel away consistent savings each month can be just as confident as high earners. Happiness and contentment in your golden years isn t dependent on wealth alone. Notes to Editors ENDS Enquiries Clare Murphy-McGreevey, H+K Strategies , clare.murphy-mcgreevey@hkstrategies.com Alexander Burley, H+K Strategies , alexander.burley@hkstrategies.com Retirement Confidence typologies Champions Confident now and increasing in 5% Confidents Confident now, with no change in 38% Waverers Confident now, but losing confidence over 3% the past year Stable Neither concerned nor confident 16% Marginals Unconfident now but not losing confidence 22% over the past year Decliners Unconfident now and losing further 16% Leading drivers of retirement confidence Forward planning 51% Security 24% Fulfilment 19% Quality of life 6% 2

3 Income distribution retirement confidence Average amount being saved into retirement per month 12% 12% 6% 18% 19% 30% 32% 21% 26% 23% 15% 27% 8% 6% 24% 9% 7% 13% 5% 7% 4% Not saving

4 Top regions for retirement confidence, based upon the proportion of people approaching retirement who are champions or confidents : 1. London 51% 2. South East 47% 3. West Midlands 46% 4. Wales 46% 5. Yorkshire and Humberside 44% 6. North West 43% 7. North East 42% 8. East of England 42% 9. South West 38% 10. Scotland 35% 11. East Midlands 30% About the Retirement Confidence Index The Retirement Confidence Index is based on an online study of 1005 UK adults aged 50 and over. It was conducted by Opinium Research between 8 and 16 October 2015 on behalf of AXA Life Invest. The Retirement Confidence Index identifies the most confident non-retired adults who are approaching retirement age. It is based on a series of financial and non-traditional (emotional) metrics that are proven to influence retirement confidence and formulated based on a statistical model that uses principal components analysis and linear regression modelling. About AXA Life Invest AXA Life Europe Limited, trading as AXA Life Invest, is a fully-owned subsidiary of the AXA Group. Established in 2006, the company manufactures unit-linked guaranteed investment products for sale in the UK, France and other European markets. AXA Life Europe is headquartered in Dublin, Ireland and is authorised by the Central Bank of Ireland. In France, AXA Life Invest provides a range of unit-linked guaranteed investment products under the Secure Advantage TM brand and has been operating on a cross-border basis in the UK since The Secure Advantage TM range of plans is underwritten by AXA Life Europe Limited, trading as AXA Life Invest. Clients must be resident in the UK for tax purposes, aged between 18 and 80 and have a minimum of 25,000 to invest in a Secure Advantage+ Pension Plan. They must be aged 55 to start taking an income from the Plan. The value of investments can fall as well as rise, and is not guaranteed. Guarantees are provided only by AXA Life Invest. For a complete description of the Secure Advantage+ Pension Plan, please refer to the Terms & Conditions and Key Features Document. 4

5 AXA Life Europe Limited, trading as AXA Life Invest is authorised by the Central Bank of Ireland. Head Office: 3 rd Floor, Guild House, Guild Street, Dublin 1, Ireland (No ). Registered in Ireland under number Member of the AXA Group. About AXA The AXA Group is a worldwide leader in insurance and asset management, with 161,000 employees serving 103 million clients in 59 countries. In 2014, IFRS revenues amounted to Euro 92.0 billion and IFRS underlying earnings to Euro 5.1 billion. AXA had Euro 1,277 billion in assets under management as of December 31, In 2014 Interbrand ranked AXA the 1st insurance brand worldwide for the 6th consecutive year. Past Company performance is not a reliable indicator of future company performance. In the UK AXA operates through a number of business units including: AXA Wealth, AXA Commercial Lines and Personal Intermediary, AXA Personal Direct and Partnerships, AXA PPP healthcare, AXA Ireland and an independent distribution business Bluefin. AXA employs over 10,500 staff in the UK. The AXA ordinary share is listed on compartment A of Euronext Paris under the ticker symbol CS (ISN FR Bloomberg: CS FP - Reuters: AXAF.PA). AXA's American Depository Share is also quoted on the OTC QX platform under the ticker symbol AXAHY. The AXA Group is included in the main international SRI indexes, such as Dow Jones Sustainability Index (DJSI) and FTSE4GOOD. It is a founding member of the UN Environment Programme's Finance Initiative (UNEP FI) Principles for Sustainable Insurance and a signatory of the UN Principles for Responsible Investment. 5