Brits could miss out on almost £30,000 in retirement funds after a near 30 per cent spike in workers opting out of pension schemes.
With inflation nearing double digits and the UK in recession, new figures released by pension provider Penfold showed those pausing contributions could cost new entrants into the workforce up to £28,000.
Savers have decided to withdraw contributions to funds in a bid to cut back expenses amid inflation reaching a 40-year high and interest rates were raised.
The number of savers opting out of company pension schemes increased 29 per cent from March to July this year.
Penfold said the impact could be felt much longer-term, with a 20-year-old pausing their contribution of £200 per month, missing out on £28,000 if this was kept for a three year period.
“Everyone understands that the pressures facing today’s savers are considerable”, said Pete Hykin, co-founder at Penfold. “Many people are feeling the pinch on their incomes and savings, but it’s vital that those people who are financially able to pay into their pension continue to do so.”
“The increasing number of opt-outs is a worrying trend, especially as the impact of pausing contributions, even for just a short period, can have a hugely detrimental impact on an individual’s finances in retirement, especially for those starting out in their career.”