Nine in 10 people are struggling to make ends meet due to the cost-of-living crisis, new research commissioned by Cushon has revealed, increasing fears that many will be unable to adequately provide for themselves in retirement.
The research found that the rising cost of living is a large concern for 52% of the UK, with 56% of those aged 55 feeling worried.
Rising bills are the biggest worry for 59% of UK adults, with the figure standing at 64% for women and 74% for people aged over 55.
Amid these growing concerns, 25% do not see how they will be able to pay their bills over the next six months, with the figure rising to 36% of 18-34-year-olds.
As a result of the rising cost of living many are cutting back in their savings, with 54% admitting they are no longer able to save as they want to and 13% say they plan to stop or reduce their pension contributions to save money in the short term – increasing to 21% of 18-34 years old.
These findings “increase fears” that many across the UK are heading towards poverty in retirement, according to Cushon, with recent research showing that those aged between 50 and 64 have pension savings that are on average 58% short of what they need, adding up to a total annual savings gap of £132bn.
Cushon CEO and founder Ben Pollard commented: “Things are exceptionally tough right now, and it’s really concerning that the rising cost of living has forced one fifth of 18–34-year-olds to plan to either reduce or completely stop their pension contributions. People need help and the right support to avoid sleepwalking into retirement.
“Many people also don’t realise they can benefit from tax relief on their pension. When you pay into a pension, you effectively get a government bonus of at least 20p for every £1 contributed, and when employer contributions are taken into account, it’s an even better deal.
“There are also a wide range of payroll-enabled workplace savings products that can allow people to get more value from their pension. One such solution is salary sacrifice, which is a great way for employers to help their employees save money and make their pay go further.
“There’s a worrying lack of understanding when it comes to salary sacrifice as well as low awareness of it as an option, there is a widespread misconception of what it is and how it works, partly due to the negative sounding name. Both employers and pension providers need to do more to educate people on the benefits.”
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