Disillusioned savers put living costs ahead of pensions

The independent pensions specialist said retirement in the UK was still more of a “process” than an event and there was a great need for increased flexibility and innovation in pension planning.

Ms Altmann, who commissioned pensions provider MetLife to see why people in the UK are so disillusioned with pensions, said it was a concern that 21 per cent of savers had cancelled pension contributions over the past two years because they needed the money.

According to the research, one in five ditched their pensions to meet everyday living costs, while 31 per cent of all people aged between 35 and 44 had stopped saving into a pension.

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The MetLife poll also found the average pension saver had stopped contributing more than £900 a year.

Dominic Grinstead, managing director, UK, for MetLife, said: “People have a wide range of financial pressures to cope with and it can be tempting to stop saving into a pension when there are other calls on your money.

“However, it is vital that people do save for retirement if they want to avoid the risk of surviving on a low income in old age. The government’s auto-enrolment reform has made a major contribution, but clearly there needs to be more done to encourage saving and making pensions work better.”

Auto enrolment should help those who have not saved enough – or nothing at all – for retirement, but it is vital that advisers make sure the right scheme is in place for employers.

Adviser Matthew Parkinson, director at Blackburn-based Your Enrolment Solution, warned that more providers needed to promote auto enrolment and a range of other solutions to help people save more in the workplace.

He said: “We have to ensure that our clients receive excellent support, advice and guidance.” He said the firm had been concerned that too often, the cost of the platform was wrapped up within a provider’s annual management charge, which he said “will directly affect good member outcomes”. YES has since partnered with Johnson Fleming to use its managed auto-enrolment platform.