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Young people are more likely to quit altogether or cut contributions to their pensions schemes than they are to save more as a result of the credit crunch, according to the a new survey.

According to the National Association of Pension Funds, 16 per cent of 16 to 24-year-olds, out of 2000 people polled throughout September, said they would leave or reduce their funds "in the current economic climate".

Just 6 per cent would increase contributions, while the remaining 78 per cent did not plan to change their retirement saving.

Among 25 to 34-year-olds, 12 per cent would reduce or leave, compared to 7 per cent who would up their saving.

Results

Source: NAPF

The research also revealed 58 per cent of respondents who have workplace schemes describe themselves as "confident" in their scheme, an increase of 10 per cent on the associations' previous survey in February.

And 41 per cent rated some form of pension as the best form of retirement saving, compared to 18 per cent preferring property, 15 per cent Isas and 6 per cent other bank accounts.

Bruce Wilson, managing director of London-based Helm Godfrey, said he was "absolutely not surprised" at people cutting their contributions but warned it was "a real concern".

He said: "During the bad times, people are going to look to short term, cash savings, rather than in the longer term.

"But it is especially a worry for the government, who want people to save more, so it is really in the horns of a dilemna.

"But it is storing up problems that will be really, really serious when you look forward to 20 or 30 years time."

Rachel Vahey, head of pensions development for Aegon UK, said the fact more people had not lost faith in their schemes was "positive" but she warned: "You may find people will have lost more confidence in any savings linked to financial institutions in the past couple of weeks."

Joanne Segars, chief executive of the National Association of Pension Funds, said: "The welcome boost in pensions confidence shows the traditional view of 'at least I have got my pension' has started to make a comeback.

"Psychologically, employees are ring-fencing their pension from the other financial pressures they are facing.

"There still remains a hard-core group of employees where more needs to be done on re-building confidence, but there lies an opportunity. Employers, the pensions sector and Government need to keep promoting the virtues of the workplace pension."