The number of people dipping into their savings has increased from 26 per cent to 33 per cent – a 27 per cent rise between June and September, according to Barnett Waddingham.
Women account for 36 per cent of this and retirees account for 37 per cent. This raises the question of how long people’s savings will last them and when they’ll be able to start building a pot back up because the crisis isn’t showing any signs of abating.
The percentage of people looking to cut back or discontinue making pension contributions have gone from 7 per cent to 6 per cent. To offset rising prices, however, this still amounts to over a million people jeopardising their long-term financial security.
Barnett Waddingham partner & head of DC Mark Futcher says: “It’s completely understandable that people are looking at all of their outgoings to try to make ends meet – and some cohorts of people have undeniably been hit worse than others. The fact that such drastic changes in behaviour have happened in just three months, without even accounting for the chaos in the last week or so, is evidence that things are going from bad to worse.
“For those whose pension contributions are in the firing line, its vital they only cut them as a last resort. Think of a workplace pension as deferred pay; it’s an outgoing now which adds up later. For example, for an average employee contributing £4 now, the taxman gives them about £1 and their employer puts in around £5. That £10 later should only be sacrificed for £4 now if other options have been exhausted.
“For anyone worried, talk to your employer. They’ll be able to give you more information and guidance. The best employers might even help shoulder the financial burden, by upping employer contributions to workplace schemes and even considering continuing to pay employee contributions if you need to pause contributions temporarily.”