Nearly one in five (19 per cent) people would have been likely to withdraw from their pension during Q4 2020 if they had early access, research from Scottish Widows has found.

The survey found that 20 per cent of people saved less for retirement during this period due to financial pressures amid the pandemic, with many facing a fall in income and unexpected expenses.

Indeed, more than a third (36 per cent) of UK households stated that they were saving for emergencies amid ongoing financial pressure and pandemic related uncertainty, whilst 29 per cent were saving for holidays and travelling, and just 22 per cent were saving for retirement.

Commenting on the findings, Scottish Widows workplace savings director, Jackie Leiper, stated: "Household savings are being severely squeezed for those hardest hit by the pandemic, with around one in five households saying that lower workplace income had made their financial situation worse at the end of 2020.

“The continued pressure on families’ financial resilience and lack of protection leaves people in danger of saving less for the long-term and more for emergencies due to uncertainty over the immediate future.

"Although finances are under strain, the latest fall was still much softer than in the three months to June, even in the face of stricter restrictions across the UK.

“Households may see some light at the end of the tunnel as we move into 2021 with the development of successful vaccines, but with a national lockdown underway, we are likely to see measures that have a severe impact on finances in the coming months as well as a delayed recovery in UK economic conditions."

The findings follow research which found that 38 per cent of furloughed workers have had to change their retirement plans as a result of the pandemic, whilst ONS data also revealed a 11.2 per cent fall in pension contributions in Q2 2020.

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