One in 10 (10%) mass-affluent adults have stopped contributing to their workplace pension in the last year, while a further 7% have temporarily paused their contributions, Raymond James has stated.

The firm’s latest Money Milestones campaign, which surveyed 3,000 adults with a salary of over £39,000 and £1,000 in accessible savings, revealed that 16% of respondents have either completely or temporarily stopped contributing to their pension, while 13% of those who are employed on a full or part-time basis have also stopped or paused their contributions.

Reasons for stopping or pausing pension contributions include rising day-to-day costs (20%), travelling (15%), wanting to focus more on investing (15%), pursuing a side project (12%) or paying off their mortgage (12%).

A further 18% said they paused their contributions to build their emergency savings pot.

While stopping pension payments may provide individuals with a short-term increase in take-home pay, Raymond James said this could “significantly reduce” their long-term retirement wealth.

It also means that individuals also miss out on “free money” from their employer contributions and the tax relief that pensions offer.

While 10% of those surveyed adults revealed they’ve reduced the amount they contribute in the last 12 months, 29% have managed to increase the amount they contribute to their workplace pension. Seven per cent have also paid in a lump sum to boost their pension.

However, 9% of respondents do not have a workplace pension at all. This falls to 4% of those in full-time employment but rises to 10% for those working part-time.

Director of financial planning at Raymond James, Harry Bell, said: "Pensions are one of the most important and effective tools for securing financial stability in later life. But with more than one in six either completely or temporarily stopping their workplace pension contributions in the last year alone, this raises major red flags. Even more so for those currently in full-time employment.

"Pensions provide a structured way to build a long-term retirement fund, being tax-efficient and benefiting from the results of compounding and additional boosts from employers. But making survival-based financial decisions, which may seem sensible in the near-term with retirement feeling a long way off, can have long-lasting consequences.

"This is where seeking advice from a financial planner can help, providing individuals with details on how much money they have now, how much is needed to achieve the retirement they want, and what the impacts may be if contributions are paused or lowered for any reason."

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