Fewer people cutting pension or SIPP contributions

Fewer people are cutting pension or SIPP contributions as the cost-of-living crisis eases, according to new data. The latest Hargreaves Lansdown poll showed that 17% of people cut or stopped pension contributions in the past six months. But that was a significant fall from the 22% who said the same thing a year ago. However, older people were more likely to cut back with a quarter of over 55s saying they had reduced contributions, compared to just 11% of the 18-34 age group. That could be due to older workers leaving the workforce early, said Hargreaves Lansdown, citing labour market data published today which showed economic inactivity in the latest quarter being driven by older workers. In comparison 7% of respondents said they had contributed more to their pensions over the past six months with a further 2% saying they had boosted their contributions after previously cutting back. Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: “After years of unrelenting pressure on our finances, there are at last signs that the cost-of-living crisis is starting to ease, with people less likely to cut back or stop contributions to their SIPP or pension. “Only 17% of people said they had done this over the past six months. This is down from well over a fifth of people (22%) who did the same thing this time last year.” She noted that older people were far more likely to cut back, with one quarter of the over 55s saying they had done so compared to just 11% of the 18-34s. She said: “This could be due to an early exit from work due to long term sickness for example.” She said the results were also borne out in the most recent HL Savings and Resilience Barometer which showed just 40% of older households are on track for a moderate retirement compared to 43% of Generation X households. Ms Morrisey said: “Our budgets have taken a real pounding as inflation has soared, leaving many needing to make tough financial decisions to make ends meet.” The survey of 2,000 people was conducted by Opinium on behalf of HL in April 2024.

Fewer people cutting pension or SIPP contributions

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