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Explore all avenues before stopping pension contributions says Punter Southall Aspire

The cost of living crisis has left nine in ten people struggling to make ends meet and concerned about funding their retirement, according to new research.

To address this, many people are reducing their savings including their pension contributions.

Over half are no longer able to save as they want to and 13 per cent say they plan to stop or reduce their pension contributions to save money in the short term – increasing to 21 per cent of 18-34 years old.

Alan Morahan, Chief Commercial Officer at Punter Southall Aspire, a financial planning and retirement savings business, said, “It’s not surprising that as household budgets get squeezed people look for ways to cut back their spending and pension contributions could be reduced or stopped completely.

However, people should be encouraged to look at other ways of saving money before considering the pension option.

In the UK, pensions are already woefully underfunded as demonstrated by this survey from Cushon, which estimated that people aged between 50 and 64 have pension savings that are on average 58 per cent short of what they need, adding up to a total annual savings gap of £132bn.

“Before reducing or ceasing pension contributions people should look at all other bills and see if these can be reduced. They should set a mantra of ‘I’m going to get it for less’ and challenge every insurance renewal, review every subscription e.g. Netflix, Spotify, Amazon Prime and, whilst it might not be possible to reduce energy costs, it might be possible to get reductions on landline and mobile phone bills and broadband costs.

“We recommend that people trawl the memory banks to see if they’ve got money lost down the back of what might be referred to as the cyber-sofa. This could be money on payment apps like PayPal, holiday cash cards, travel cards like Oyster, gift cards, or even in a betting account set up to have a flutter on the Grand National.

“All avenues should be explored before cutting pension contributions because no one wants the difficult times we’re experiencing now to become the reality for their retirement years.”