23% of pension savers plan to cut contributions as cost of living crisis bites

Nearly a quarter (23%) of British people with a pension are considering reducing their pensions contributions, according to new research from Aviva.

The survey found that due to current cost of living pressures nearly 5 million people may be considering taking money out of their pension, opting out of automatic enrolment or reducing, pausing or stopping their contributions.

The figures varied significantly by age, rising to 42% of under-24s and 38% amongst 25 to 34-year-olds.

There was a significant gender gap, with 28% of men planning to take one or more of these actions compared to 18% of women.

The report also found that 79% of respondents who sought financial advice before taking an action had found it helpful.

Alistair McQueen, Head of Savings and Retirement at Aviva says: “When times are hard, we understandably try to find ways to cut costs, so considering your savings is an obvious thing to do. But it’s important to weigh up the pros and cons when it comes to your pension.

“Pensions carry unique financial benefits that cannot be replicated elsewhere. For example, if you are in a workplace pension, it is very probable that your employer will be contributing too. If you stop saving, your employer will probably stop with you, and this boost will be lost.

“Pension saving also benefits from tax relief. Stop saving, and tax relief will stop at the same time. It’s important to understand these other benefits when you are looking at your pension.

“Many modern pensions give you great control over how and when you save. For example, you can often stop, start, increase, or decrease the amount you save, as and when you want. And from the age of 55, there is great control of how and when you access your savings.

“The benefits of these simple flexibilities are more valuable than ever during these difficult times. However, it is important to consider all options and take advice if possible.”

The research surveyed 2061 general consumers.