Friday, September 9, 2011

Downturn heightens pension crisis: one in six people stopped paying into to their pension in the wake of the recession in UK

More than a million people pulled out of making personal pension contributions due to a squeeze on household finances, according to the Office of National Statistics, wiping billions from pension pots.

The ONS also raised concerns that a generation of pensioners would not have enough money in their old age because of the demise of gold-plated final salary schemes.

The figures led to warnings that Britons were falling into a “vicious spiral” of reducing their savings when the need to prepare for retirement was growing.

In its Pension Trends report, the ONS said that many people who had been making regular contributions had simply stopped paying money into their scheme as a result of the recession.

Rising inflation, pay freezes and high utility bills have eroded disposable household incomes, meaning that people have had to prioritise what they spend their money on, he said. more