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Halt to pensions payments

Fewer people are putting pennies in the pensions pot, and insurance company Prudential warns that delaying making contributions could wipe thousands of pounds off the value of retirement funds.

The reasons for stopping payments include being out of work, and not being able to afford the contributions. Half of those who have stopped claim that they don't intend to start up again.

Vince Smith-Hughes, head of business development at Prudential, said 'Tightening your belt when times are hard is sometimes necessary, and putting pension contributions on hold might seem an easy way to save money. However, neglecting pensions today means throwing money away tomorrow, as savers will miss out on perks, such as tax relief and employer contributions.'

Prudential estimate that a 45-year-old who stops making monthly payments of £200 over the course of a year would stand to lose £7,000 in his final pension fund.

Those planning to cash in on the value of their homes to help fund retirement has increased by 500,000 in the last year as a result of the problem.

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