More than a third (37 per cent) of UK adults with a private pension who have experienced a major life event have reduced, paused or stopped their pension contributions as a result, research from Standard Life has revealed.

The findings highlighted how common life events can disrupt retirement saving, with career breaks (45 per cent), redundancy (44 per cent), becoming self-employed (33 per cent), long-term illness (28 per cent) and having children (21 per cent) among the most frequent triggers for pausing or reducing contributions.

According to the research, pension contributions were paused for an average of two years following such events.

Career breaks resulted in the most frequent disruption, with those affected pausing contributions for an average of one year and 10 months, while redundancy typically led to a shorter interruption of around one year and four months.

In contrast, events associated with longer-term lifestyle changes tended to result in longer gaps in pension saving.

Indeed, those who paused contributions after having children did so for an average of two years and four months, while those with long-term illness paused for an average of two years and one month.

Standard Life’s analysis also suggested that these breaks could have a lasting impact on retirement outcomes.

For example, someone starting work at the age of 22 on a salary of £25,000 and paying minimum auto-enrolment contributions of 5 per cent from the employee and 3 per cent from the employer could build a pension pot of around £210,000 by age 68, assuming 2 per cent inflation and charges.

However, a two-year break in contributions between the ages of 30 and 32 could reduce the pot to around £200,000, while a five-year pause between the ages of 30 and 35 could lower it to £185,000.

A 10-year break between the ages of 30 and 40 could reduce the pot to £161,000, while a 15-year pause between the ages of 30 and 45 could lower it further to £138,000.

The research also highlighted that the impact of life events on pension saving was not evenly distributed across the population.

It found that women were significantly more likely than men to pause, reduce or stop pension contributions after starting a family, with 27 per cent reporting this compared with 16 per cent of men.

Younger generations were also more likely to experience disruptions to pension saving.

Around a third of Gen Z (32 per cent) and Millennials (33 per cent) said they had paused or reduced contributions due to life events, compared with 24 per cent of Gen X and 16 per cent of Baby Boomers.

For Gen Z in particular, becoming self-employed (56 per cent), taking a career break such as maternity leave (59 per cent), redundancy (57 per cent), having children (51 per cent) and buying a first home (44 per cent) were all cited as factors contributing to pauses in pension saving.

Despite these disruptions, the research found that many savers remained optimistic about their ability to catch up.

Nearly two-thirds (62 per cent) of those yet to retire who had paused, reduced or stopped contributions due to life events believed they would still be able to make up the difference.

In addition, almost two-fifths (38 per cent) of those who paused contributions said they already had a plan in place to address the shortfall, with 32 per cent planning to increase contributions as their income rose and 24 per cent expecting to work longer.

The research also found that not all life events led to reduced saving.

Nearly a fifth (18 per cent) of those who started their own business said it led them to increase their pension contributions, as did 11 per cent of those who had children.

Standard Life retirement savings director, Mike Ambery, said life events often made retirement saving less predictable than the linear journey that many pension systems assume.

“Life rarely follows a straight line - and pensions don’t either,” he stated.

“Life events such as being made redundant, managing long-term illness, starting a family, or taking time out are simply part of how people actually live, and it’s completely normal for retirement saving to pause during those moments.

“The challenge is that pensions build over decades, so even relatively short gaps can have a bigger impact than people expect. A pause might feel temporary at the time, yet it can have a lasting impact if contributions aren’t restarted.”

Ambery added that small steps can help savers rebuild momentum after a break in contributions.

“Restarting contributions as soon as possible can help rebuild momentum," he said.

"From there, gradually increasing payments when income rises, using part of a pay increase or bonus to boost pension contributions, and checking the full employer contribution available through a workplace scheme can all help empower people to engage with their financial futures and help them get back on track to achieve better outcomes and greater financial security in later life.”

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