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.”

The information contained in Prudential UK’s press releases is intended solely for journalists and should not be used by consumers to make financial decisions. Full consumer product information can be found at www.pru.co.uk.

About Prudential
“Prudential” is a trading name of The Prudential Assurance Company Limited, which is registered in England and Wales. This name is also used by other companies within the Prudential Group, which between them provide a range of financial products including life assurance, pensions, savings and investment products. Registered Office at Laurence Pountney Hill, London EC4R 0HH. Registered number 15454. Authorised and regulated by the Financial Services Authority.

Via EPR Network
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