One in five stopping pension to save money

More than one in five pension savers have stopped paying into schemes over the past two years to meet everyday living costs, according to new research from MetLife.

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A nationwide study by the provider found 21 per cent of savers have cancelled pension contributions to save money over the past two years, with the average annual payment cancelled amounting to more than £900.

The highest rates of cancellations were among those aged 35 to 44 where 31 per cent have dropped pension saving and among those aged 45 to 54 where 28 per cent have cancelled contributions.

The MetLife research shows 49 per cent of all workers would want to continue working past the current standard retirement age of 65 – rising to 52 per cent among those aged 55 to 64.

It also found around 23 per cent of employees would want to continue full-time in their current job at the age of 65 instead of retiring while 21 per cent would want to go part-time either in their current job or in another job. Around 4 per cent would want to start another full-time job.

MetLife managing director, UK Dominic Grinstead says: “People have a wide range of financial pressures to cope with and it can be tempting to stop saving into a pension when there are other calls on your money.

“However it is vital that people do save for retirement if they want to avoid the risk of surviving on a low income in old age. The Government’s auto-enrolment reform has made a major contribution but clearly there needs to be more done to encourage saving and making pensions work better.”