Two in five UK adults aged 18 to 34 have stopped or reduced their pension contributions as a result of COVID-19, research by Royal London has uncovered.
Specifically, the findings show that 12% of millennials have halted their pension contributions due to the pandemic, while 28% have reduced their payments.
This compares with just 16% of 35-54-year-olds who have eased their pension contributions during the coronavirus lockdown.
Affordability was the most common reason given for doing so, affecting four in 10 of those who have reduced or stopped their payments.
This was a bigger issue for millennials, with more than half saying they had altered their pension payments because of it.
“The COVID pandemic has put a real strain on many peoples’ finances, and the research shows many are looking to reduce their outgoings by cutting or even stopping contributions,” said Lorna Blyth, head of investment solutions at Royal London.
“However, the vast majority of people have plans to resume or increase their pension contributions at some point, with some already having done so.”
A total of 2,000 adults were involved in the latest research, which also found that 79% plan to resume or increase their pension contributions at some point in the future.
This includes 11% who have already resumed or increased their payments during lockdown, and 37% that plan to do so within three months.
Royal London also found that 18% of people have stopped or reduced contributions on other savings or investment products as a result of COVID-19, rising to 29% among millennials.
“It is vital that people follow through with their intentions to resume contributions as soon as they are able if they are to avoid long-term damage to their retirement prospects,” Blyth continued.
“It’s important to take proper financial advice to help determine the best decision for your finances.”
Author: Chris Seekings
Image credit: iStock
