Pensions put on ice as finances are squeezed - Pensions - News - Moneyfacts

News

Pensions put on ice as finances are squeezed

Pensions put on ice as finances are squeezed

Category: Pensions

Updated: 22/11/2011
First Published: 28/09/2011

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

A large minority of people who have yet to retire have stopped paying into their pension pots, new figures have revealed.

The results of Prudential's research show that one in three (33%) of those who have put pension payments on hold have done so because they are out of work, while over a quarter (27%) say that they can no longer afford the contributions.

More than two-fifths (43%) of those who have stopped paying into their pensions do not plan to start again, despite the long-term impact it will have on their retirement income.

Figures show that irregular contributions could reduce the values of savers' pensions by thousands of pounds.

In fact, a saver who misses a year of gross contributions of £2,400 could see their final pension fund reduced by £7,000.

"Tightening your belt when times are hard is sometimes necessary, and putting pension contributions on hold might seem an easy way to save money; however, neglecting pensions today means throwing money away tomorrow, as savers will miss out on perks, such as tax relief and employer contributions," Vince Smith-Hughes, head of business development at Prudential,said.

"Abandoning your pension pot really should be a last resort when times are tough.

"By getting into the routine of saving into a pension as early as possible, savers will be able to ensure the comfortable retirement that they deserve."

The figures are likely to concern the Government ahead of its plan to roll-out an auto-enrolment workplace pension scheme over the next five years.

The initiative will offer workplace pension to employees that do not currently have the option to save into a pension

However, these figures suggest that many could choose to opt-out of the scheme.

Find the best pension for you -Compare pensions.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Savers more worried about looks than pension

When you think of getting older, what’s the first thing that comes to mind? For many, it’ll be fears about their looks – but they should really be concerned about their financial situation.

Pension funds defy uncertainty with strong returns

Economic uncertainty has been a persistent theme in recent months, but happily, not every area has been negatively impacted. Indeed, our latest figures show that the pension sector has bucked the trend and posted unexpectedly strong returns.

Do you know what a pension is?

Pensions are something we all need to get our heads round, and we’re continually told that it’s important to start saving into one from as early as possible. Yet new research suggests that this advice could be falling on deaf ears.
 
Close