UK. Cost-of-living crisis could slash pensions by quarter
The youngest UK workers could see their retirement savings cut by a quarter if they were to reduce their pension contributions by 2% in response to the cost-of-living crisis.
That is according to new analysis by consultancy firm Broadstone, which found that 25-year-olds could lose up to £60,000 of their pension savings if a ‘temporary’ cutback in contributions becomes permanent.
This is based on 2% reduction in employee contributions – taking total contributions down from 8% to 6%, assuming that 3% employer contributions stay constant – on an average salary rising by inflation over the course of a working career until state pension age.
Although the youngest pension savers have most to lose, the analysis suggests that a 35-year-old would miss out on nearly £40,000, while even a 55-year-old permanently paying 2% less into their pension could see their pot value reduced by over £10,000.
Read more @The Actuary
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