Two in five millennials cut pension payments in lockdown
Two in five people aged 18-34 stopped or reduced their pension contributions as a result of the coronavirus pandemic.
Millennials were most likely to have reduced (28%) or stopped their pension contributions (12%) altogether due to Covid-19. By comparison, just 16% of those aged 35-54 said they were halting or decreasing their pension payments.
The research by mutual insurer Royal London revealed that affordability was the most common reason for altering pension contributions. More than half of 18-34-year-olds said they changed their pension contributions because of affordability concerns.
However, the Opinium poll of 2,000 people showed this is unlikely to be a long-term issue. Eight in 10 people said they plan to resume or increase their contributions at some point in the future.
This includes more than one in ten (11%) who have already resumed or increased contributions during lockdown and 37% saying they plan to do so within three months.
Royal London also found that nearly one in five (18%) people have stopped or reduced contributions on other savings/investment products as a result of Covid-19, with those under 35 more likely to have stopped or reduced (29%).
Lorna Blyth, head of investment solutions at Royal London, said: “The Covid-19 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. However, it is positive to see the 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.”