Almost two in five pension investors have stopped contributions or cut back on payments in the past five years, new research from wealth manager Investec Wealth & Investment has revealed.
The nationwide study found a quarter have stopped paying into their pensions altogether, while another 12% have dramatically or slightly reduced monthly contributions.
One of the primary reasons given was the cost-of-living crisis, followed by moving jobs or receiving a pay cut.
Investec estimates the average amount of lost contributions adds up to nearly £900 a year.
Nearly half questioned in the study by Investec Wealth & Investment (UK), part of Rathbones Group, do not plan to restart or increase contributions, while 30% admit the decision will have an impact on their retirement date.
However, around 11% say they have increased the amount they pay into their pension each month and 8% have cut back on contributions into their fund for tax reasons, such as exceeding the annual allowance.
More than a quarter (26%) who have stopped or reduced contributions plan to restart within a year, with 11% aiming to do so within six months.
But pension investors admit stopping or reducing contributions will affect their retirement date – around 30% say they will delay when they retire a result with 6% saying they will not be able to retire at all.
The cost of living crisis is a major reason for cutting or stopping contributions cited by 25% but 26% say moving jobs or suffering a pay cut meant they stopped or reduced contributions.
Overall, 13% blamed the impact of the Covid-19 crisis.
Investec Wealth & Investment chartered senior financial planner Faye Church said: “Saving as much as possible into your pension for as long as possible is the best way to maximise your retirement income.
“Stopping or reducing contributions will clearly have a major impact, however, contributing a small amount is better than contributing nothing at all.
“That is demonstrated by the research which shows that people who have stopped or cut contributions have admitted that it has delayed their retirement plans with some even saying they cannot afford to retire as a result.
“However, those closer to retirement who now cannot afford to retire, may have been able to to if they had sought advice earlier in their years.”
