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As disposable incomes are squeezed, people are reducing their monthly pension savings.
Pension contributions have dropped by 53 percent in the last 18 months as the credit crunch and the economic downturn forces UK workers to cut back, new research shows. According to Prudential, average monthly pension savings have fallen from £279.38 in March last year to just £129.35 today.
A survey carried out by the financial services company revealed that one in five people have reduced the amount they save for their retirement as a result of the financial crisis, while 55 per cent of UK workers making no contributions at all to company or private pensions.
Martyn Bogira, defined contributions director at Prudential, said: "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."
The research shows that UK workers are saving an average of £1,552.20 a year into pension funds, with women saving significantly less, at just £899.40 a year.
Prudential's findings come after David Dunn, director of Fidelity International Retirement, warned that people are becoming increasingly reliant on non-pension savings to fund their retirement.
According to the Financial Times, he told delegates at the Personal Finance Society's 2008 Value of Advice conference that non-pension assets are unlikely to provide the same stable income as an annuity and are more vulnerable to economic instability.
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