Pensions on ice as inflation busts retirement planning

The rising cost of living is leading to Brits saving less.

A poll released today reveals 43 per cent of people are now saving far less or little less for their retirement in response to rising food, oil and fuel prices.

Furthermore 23 per cent have no pension preparation in place.

The balance between the needs of today and those of tomorrow sees pressure on budgets as inflation rises result in pension saving tailing off.

Andrew James, retirement planning manager at Edward Jones, said: "It's a big concern that people of all ages and social classes are cutting back saving for retirement in order to pay for essentials.

"If this trend continues then we are just storing up even more problems for the future."

He added: "Those in their late 40s and 50s really do not have the time to make up for any missed contributions so we believe it's vital for their long-term financial futures that they keep saving."

Across social groups the levels of people now turning away from pension saving is uniform, but some geographical differences.

Those in the north were most likely to have reduced saving for retirement, 48 per cent, while in London it was 39 per cent.

"It is imperative the government, and all those involved in the pensions industry do all they can to keep driving the message home that people must continue to make provisions for their retirement," Mr James added.

"We would also like to see clearer guidelines on pension rules to allow the industry time to talk to people about saving for the long-term, and helping to educate individuals in the UK about how tax efficient saving for retirement can be - and the earlier people start the easier it will be."