Brits 'cutting pension contributions'

29/07/2009

Further evidence that Britain's workers are not saving for their pensions has emerged, with the release of a new report from Prudential.

The insurance giant said today that 16 per cent of those who have a pension have either cut payments or stopped them altogether over the past five years.

What's more, over the next decade the number of people expecting to retire with just the state pension and their own non-pension savings to live on is thought likely to rise from 22 per cent to 27 per cent.

Prudential's report follows the release of two new studies recently, highlighting the dire financial plight of UK pensioners.

Datamonitor said that a majority of 50 to 64-year-olds are not currently saving into a private pension - while Eurostat said that Brits face the largest fall in income when they retire across the entire EU.

Martyn Bogira, director of defined contribution solutions at Prudential, said: "It's worrying that many people who have been working for years and saving for retirement seem to have given up hope and stopped paying into their pension. This is the last thing they should be doing."

EuroDebt director Kevin Still also commented: "As a Debt Management Company we are concerned where people have stopped contributing to their pension or worse have dropped critical insurance cover as a result of financial problems. It is still very common for consumers in debt to pay the lender or collector that shouts loudest, often to the detriment of themselves and priority expenditure, like the rent, mortgage, council tax and utilities.

"One of the key roles played by a professional Debt Manager is to evaluate the household income and expenditure and then prioritise essential expenditure items, in some instances making allowance for dropped insurances - which may be a legal requirement. Many people using EuroDebt’s Debt Calculator tool rate their budgeting skills as poor."

He added: "One of the first priorities for anyone in financial difficulty is to have a detailed budget and understanding of when income comes in and essential expenditure goes out. Sometimes this may mean cancelling direct debits or standing orders to non-essential creditors and reaching an alternate repayment arrangement."

Tags; Budgeting Advice, Retirement Money Problems,

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