Schooling costs cut into pensions
Education costs are cutting into parents’ pensions to the tune of £7.3bn, according to research from MetLife Europe.
The pension provider found that approximately 23% of adults say the cost of funding extra tuition is having a negative impact on their ability to save. Common costs include paying for extra tuition, helping with university fees or paying for private education. The average amount being diverted from pensions for such reasons is £57 per month, but some people divert up to £300 per month.
However, MetLife warned that cutting back on pension contributions could reduce income in retirement. Ed Gardner, chief executive officer at MetLife UK, said: “Paying for education is a vital investment in the future of our children but it is worrying when that investment is being made at the expense of future retirement income.
“In the current economic climate everyone’s finances are under strain and it is understandable if people cut back. However saving into a pension is a vital part of financial planning and savers need access to a wider range of flexible retirement solutions offering increased certainty.”