Independent research conducted by Prudential reveals that 18%* of UK workers say they have reduced the amount they save for an occupational or private pension as a result of the credit crunch. Of these people, 36% do not anticipate they will be able to increase the amount they save into a pension in the future.
The research shows that voluntary pension contributions to private and company schemes have plummeted by 53% in just 18 months** as the current economic downturn forces UK adults to cut monthly pension savings from an average £279.38 a month in March 2007 to just £129.35 a month now.
The findings also reveal that UK workers are on average saving just £1,552.20 a year into pension funds with women saving even less, around £74.95 per month or £899.40 a year.
In addition, more than half of all UK workers (55%) do not contribute to a company pension or private pension, leaving them completely reliant on the State pension or other savings.
The results compared to previous Prudential studies, the last of these conducted in March 2008, indicate that pension contributions have fallen by half from their March 2007 level of £279.38 a month to an average of just £144.57 a month, and the latest figures demonstrate that contributions have continued to fall still further from March to September 2008.
Martyn Bogira, Defined Contributions Director, Prudential stated: “It is staggering to see how much UK pension contributions are being scaled back as people look to reduce their outgoings but while a pension scheme may seem a relatively pain free way to increase disposable income today, the impact of this in retirement will be significant.
“We would urge people to think carefully before cutting pension contributions as it is vital that they build a strong savings pot to ensure they are in the best position possible to enable them to enjoy a comfortable retirement.”
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Notes to editors
* Based on an independent online survey conducted by Research Plus on behalf of Prudential. A total of 1000 UK adults aged 18+ were surveyed between 4th – 9th September 2008.
** Based on an independent online survey conducted by Experian on behalf of Prudential. A total of 1500 responses were obtained across the UK among adults aged 18 and over, between 29th February – 5th March 2008. The 2007 survey was conducted between 19th and 25th April 2007 among 1566 UK adults.
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