Prudential Reveals People Pruning Back Pension Contributions
A significant number of people could be placing greater pressure on their finances in later life.
Such is the assertion of Prudential, which reveals that the economic downturn is currently seeing about a fifth of Britons reduce the amount of money they choose to invest into private or occupational pension schemes. According to the firm, 18 per cent of UK workers cite the credit crisis as the reason for why they are scaling back contributions into a retirement fund.
Consequently, the typical person is revealed to be saving an average of 129 pounds and 35 pence into a private pension scheme each month, a fall of 53 per cent from the typical 279 pounds and 38 pence that was noted in March 2007. In March this year, it was reported that Brits were placing an average of 144 pounds into such a saving scheme. Overall, it was reported that just over 1,552 pounds is now being placed into the average account over the course of a year.
By taking steps to decrease the amount of money placed into a pension, consumers could find that their financial standing in later life is not as strong as they had expected. This could result in problems when it comes to managing various spending commitments in areas such as paying for repairs to property, making personal loan repayments or dealing with a utility bill that is more costly than previously imagined.
However, it appears that women in particular could be placing their financial future under pressure as females are current putting a monthly average just under 75 pounds into a pension plan each month, a total of 899 pounds over the course of a year. Meanwhile, it was revealed that over half (55 per cent) of workers are currently failing to make any contributions into a private or company pension plan. Furthermore, out of those Britons who report to have cut back on their pension contributions, over a third (36 per cent) state that they do not envisage being in a position to increase their savings in the future.
Commenting on the figures, Martyn Bogira, defined contributions director for Prudential, said: “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 fund 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.”
For those consumers with concern about their ability to save money for the future, applying for a debt consolidation loan may prove to be useful. By taking out this kind of loan, borrowers may be able to merge numerous constraints in their spending into a single low-cost monthly repayment. As such, they could find they are left with more disposable income, money which could then be placed into a savings or retirement fund. This may be especially helpful after Abbey recently revealed that the average Briton is currently spending three-quarters of their take-home pay on necessities such as food and utility bills.
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