One in five people have reduced their pension contributions or stopped saving for retirement altogether due to cost-of-living pressures.
As household budgets continue to tighten, new research suggests 14 per cent of people have stopped paying into their pensions while eight per cent have cut their contributions.
Men are more likely to have taken the action than women, as well as wealthier people. And younger people are more likely to have done so than older workers.
Meanwhile, 62 per cent say they have not changed their approach to pension contributions.
Pension cutbacks are ‘no surprise’
Helen Morrisey, head of retirement at Hargreaves Lansdown which carried out the study of around 2,000 adults, said the actions are “understandable”.
“Rising prices have made balancing budgets a real struggle and it’s no surprise that, after making all the cuts they can elsewhere, people are turning their attention to their pensions,” she said.
“Such actions are understandable – keeping up pension contributions is extremely important but, given the enormous pressures our finances have been under for such a sustained period of time, it makes sense if people are prioritising the here and now.”
Rebuild as soon as possible
It is vital that people resume their pension contributions as soon as they are financially able to, she said.
“The most important thing is to make sure that, when things get better, that you resume your pension contributions as soon as you can.
“Make a note in your diary at a regular interval to remind you to assess whether you can afford to restart, otherwise it may be something you don’t get round to doing.”
Ms Morrissey added that other ways to rebuild a pension after a break is to make sure to increase contributions if you receive a pay rise or get a new job.
She said: “Doing it straightaway means you don’t get used to having the extra cash.
“It’s also worth checking whether your employer operates a matching system where they will boost their contribution to your pension if you increase yours. This can really help you rebuild your pension planning after a difficult time.”
Need advice about saving for retirement? We can help.
