Around one in six (16 per cent) people who stopped or reduced their pension contributions over the past year did so because of a change in their employment status, representing around 1.7 million of the UK’s total of 45 million-plus retirement savers, research from ISIPP has revealed.

The survey also found that around half who cut back or stopped payments did so because they moved jobs, while the rest stopped paying into a pension because they were self-employed and no longer had a pension scheme.

However, the research also found that people who stopped or cut back typically do restart payments, as just 11 per cent who have done so say they will never start saving into a pension again.

In addition to this, a further 11 per cent of those surveyed said that they would increase pension contributions if they consolidated their pension pots into one, while another 17 per cent said that they would make more regular contributions.

Despite this, less than one in 10 (9 per cent) say they have already consolidated pension savings.

Commenting on the findings, ISIPP managing director, Hrishi Kulkarni, emphasised that whilst the cost-of-living crisis is forcing many people to think hard about savings, individuals should be cautious about reducing or stopping their pension contributions given the long-term impact.

She stated: “In most cases where people have stopped pension savings after becoming self-employed or moving jobs they will restart retirement saving. But it is worryingly the case that the self-employed are most likely to not save into a pension as they don’t have an employer making the payment on their behalf.

“People should think carefully about stopping pension contributions as while it will save money to some extent in the short-term it will cost more in the long-term.

“People should also consider combining all their existing pensions as consolidation could substantially save money and help increase the funds available to them at retirement. iSIPP makes it easy to combine pensions, make contributions and give you control over your investments.”

Share Story: