Written by Retirement Line Updated: 23rd January 2024
The rise in the cost of living has cast a shadow on the retirement plans of many pension savers. New data reveals that many people are reducing or even stopping their retirement savings to get through challenging times.
Unsurprisingly, the surge in prices for fuel, food and housing has left some pension savers and those already in retirement increasingly worried about their financial security. Recent research from Defined Contribution Investment Forum (DCIF) and Ignition House shows that more than 1 in 10 people (13%) have stopped paying into their pension due to rising prices.
The data also reveals that more than a quarter (28%) have not been able to save as much as they hoped. One in ten of the over-50s group even admitted to dipping into their pension savings as a direct result of the rising cost of living. A further 12% expect that they will need to do so at some point soon.
Fortunately not everyone has been impacted to such an extent by the rising cost of living. The data shows 60% of UK adults aged 55-64 feel that it has had no impact on their pension saving habits. A lucky minority (9%) of savers have even been able to up their pension contributions.
Recent figures show a worrying increase in the number of people reducing contributions and even stopping them altogether since January 2023. Research conducted at the start of this year by the Pensions Management Institute (PMI) indicated that the strain was not quite so prevalent then.
Their study found that of those saving into a pension scheme over the previous twelve months, just 7% had ceased their contributions. A further 13% had reduced them, and 20% were considering doing so over the coming months.
The research also revealed that 17% of those old enough to do so have withdrawn money from their pension savings to meet short-term needs. In addition, 70% believe that they would have to defer retirement, and typically expect they will need to work for an extra three years due to the cost of living crisis.
If you are 55+ and are thinking about accessing all or some of your pension savings soon then our Annuity Specialists are here to help you.
In addition to answering your questions about annuities, they will also check the annuity rates and income you can achieve based on your individual circumstances.
Alternatively, use our free online tool to discover how much annuity income you might expect to achieve from your pension savings.