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Pension saving hit by economic downturn

British workers are putting retirement saving on hold as they brace themselves for an economic slowdown, according to recent research. One in 10 people who are currently saving into a pension expect either to stop making contributions or to reduce them during the coming year as a result of the worsening economic outlook.

People expect to stop paying into a pension or make lower payments for an average of 22 months, although 13% thought it would be more than five years before they resumed their current level of contributions, according to financial services firm Brewin Dolphin.

Around 12% of people said they would be reducing the amount they saved into a pension in order to meet increased mortgage repayments, while the same proportion said they would need the extra cash to pay for school fees or their car. One in 10 people said they would need the money to repay debt, while 8% said the cash would be used to meet the cost of having a baby.

The research found that women were more likely to be planning to put retirement saving on hold than men, while those aged between 25 and 34 were more likely to do so than other age groups.

Charlotte Black, director of corporate affairs at Brewin Dolphin, said: “Given tighter credit conditions it seems likely that pension payment breaks will become increasingly prevalent.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .