The cost-of-living crisis is threatening to have a “destructive impact” on the long-term savings plans of young people in the UK, research from AJ Bell has indicated.

The investment platform’s findings come as inflation is expected to hit 9% later this week, while Bank of England governor, Andrew Bailey, has suggested it could hit 10% before the end of the year.

AJ Bell’s research, based on a study of 2,000 people in the UK, revealed that 15% of those aged between 18 and 34 have already cut back on their pension contributions due to the cost-of-living crisis.

A further one in four (25%) of those in this age bracket also indicated they are considering cutting back on pension contributions. This figure is almost double the number of people aged between 35 and 54 who have either cut back (10%) or are considering cutting back (11%) their pension contributions.

Analysis by the investment platform showed that for a 30-year-old on a salary of £30,000 contributing 8% to their pension, pausing contributions for three years could now cost them £15,000 when they reach the state pension age of 68.

AJ Bell’s findings also revealed that a similar proportion of people in the 18 to 34 age bracket have either cut back (16%) or are considering cutting back (22%) their ISA subscriptions in response to rising prices – a figure that is again significantly higher than older generations.

Someone saving the maximum of £4,000 a year into a Lifetime ISA to save for a house deposit will find themselves over £21,000 worse off if they delay contributions for three years, the investment platform’s analysis also revealed.

“Millions of Brits are being forced to tighten their belts across all areas of their lives in various ways as inflation continues to spiral,” AJ Bell head of retirement policy, Tom Selby, commented.

“With some expecting price rises to hit double-digits this year, people are cutting back on everything from their home energy use, clothes shopping, trips to the cinema, holidays, subscriptions and, of course, their food shop.

“It is not just day-to-day spending that is in the firing line, however – millions of people are considering sacrificing saving for the future too. While people of all ages have either cut back their pension contributions or are thinking of doing so in the face of the cost-of-living crisis, it is younger savers who are the most likely to jeopardise their retirement savings.

“In fact, one in six people aged 18 to 34 have already cut back the amount they put into their pension and alarmingly a further one in every four people are considering cutting back.

“For those who have already cut back saving, it is important to sit down and get a plan in place to increase contributions again when you feel you can afford to. For anyone thinking about reducing the amount they put in their pension or ISA, it is vital to understand the potential implications of that decision.”

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