Retirement savers may reduce or pause contributions or disengage from their pensions entirely due to current volatility in the jobs market, according to Kirsty Ross, proposition director at People’s Partnership
Ross made the comments following the release of the latest labour market data by KPMG and REC, which showed that, as of 23 February, rates of pay inflation remained below their long-run trends, and that engineering was the only sector to see an improvement in demand for permanent staff over the last month.
“During periods when hiring slows or job movement increases, some savers may reduce or pause contributions or disengage from their pensions entirely. Even short interruptions to pension saving can have a significant long-term effect,” says Ross.
“This is why clear and consistent communication is so important. Employers play a key role in reinforcing the value of workplace pensions, particularly the benefit of employer contributions and tax relief. Helping members understand what they receive, and what sustained contributions means for their future, can support better long-term decisions for savers,” she continues.
Ross also claimed that retirement saving is most effective when it remains consistent, and that encouraging and supporting members to stay engaged, even during periods of economic instability, is central to helping savers achieve better long-term outcomes.