Two-fifths (40%) of employees aged 18-34 have either stopped (12%) or reduced (28%) their pension savings during the Covid-19 (Coronavirus) pandemic, according to research by Royal London.
Its research, which surveyed 2,000 employees, also found that respondents aged 18-34 are the age group most likely to make this decision regardless of the current climate, compared with 16% of those aged 35-54. Furthermore, more than half (51%) of 18-34 year olds cited affordability as the main factor behind them reducing or stopping their pension contributions.
However, 79% of those that have stopped or reduced their pension contributions, plan to resume or increase these in the future, including a further 11% who have resumed or increased contributions in the past five months. More than a third (37%) also plan to do so in the next three months.
The survey also found that 18% of employees have stopped or reduced their savings or investment products due to the Coronavirus pandemic, with 29% of those who have done do being under the age of 35.
Lorna Blyth, head of investment solutions at Royal London, said: “The Coronavirus pandemic has put a real strain on many peoples’ finances, and the research shows that many are looking to reduce their outgoings by cutting or even stopping contributions. However, it is positive to see the vast majority of people have plans to resume or increase their pension contributions at some point, with some already having done so.
“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. It’s important to take proper financial advice to help determine the best decision for your finances.”