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One in six have stopped workplace pension contributions in past 12 months – Raymond James

One in 10 stopped contributing completely, while 7% temporarily paused payments, research from Raymond James found.

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One in six have stopped workplace pension contributions in past 12 months – Raymond James
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One in six mass-affluent adults stopped or paused their workplace pension contributions during the past 12 months, research from Raymond James found.

The research covered people with a pre-tax salary of at least £39,000 and £1,000 or more in accessible cash or savings.

One in 10 stopped contributing completely, while 7% temporarily paused payments.

Among people in full or part-time employment, 13% stopped or paused their contributions.

10% reduced the amount they paid into their workplace pension. 

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However, 29% increased their contributions and 7% paid in a lump sum.

The research also found that 9% of respondents did not have a workplace pension. 

This fell to 4% among those in full-time employment but rose to 10% among part-time workers.

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Of those who stopped, paused or reduced their contributions, 20% did so to cover rising day-to-day living costs.

18% used the money to build emergency savings, while 15% wanted to travel and 15% chose to focus on savings rather than investments.

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12% redirected the money towards a side project or second income and the same percentage used it to pay off their mortgage.

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11% changed their contributions while taking a break from work, while 11% did so to have children. 

Some 10% cited the impact of the conflict in the Middle East on their investments.

Harry Bell, director of financial planning at Raymond James, said: “Pensions are one of the most important and effective tools for securing financial stability in later life. 

“But with more than one in six either completely or temporarily stopping their workplace pension contributions in the last year alone, this raises major red flags. 

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“Even more so for those currently in full time employment.”

Bell added: “Pensions provide a structured way to build a long-term retirement fund, being tax-efficient and benefiting from the results of compounding and additional boosts from employers. 

“But making survival-based financial decisions, which may seem sensible in the near-term with retirement feeling a long way off, can have long-lasting consequences.

“This is where seeking advice from a financial planner can help, providing individuals with details on how much money they have now, how much is needed to achieve the retirement they want, and what the impacts may be if contributions are paused or lowered for any reason.”

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