Nearly half (49 per cent) of working adults have changed their retirement plans due to the cost-of-living crisis, new research by the Pensions Management Institute (PMI) has shown.

This included 23 per cent of people who revealed they had reduced their pension contributions, while one in 20 (5 per cent) had stopped their contributions altogether.

Almost a quarter (24 per cent) of working adults stated that they were planning to delay their retirement as a result of the increased cost of living.

“Our research shows the concerns that many people have about how well they can prepare for retirement,” commented PMI council member, Tim Box.

“With only 30 per cent of our respondents believing that the state pension will be more than half of their retirement income, the role of private pension provision to fill the gap is critically important.

“If the state pension age is to be raised to 71, as has recently been speculated about, then private pension savings are likely to be the only source of income between stopping work and the commencement of the state pension for a huge swathe of those born after 1970.”

The PMI’s study also found that two-thirds of respondents felt they did not have the required knowledge to choose their pension provider, despite almost 60 per cent showing some interest in being able to choose their own provider.

The institute said that this was relevant to the government’s proposed pot for life model, as it showed the importance of improving financial and pension education before implementing such a reform.

Its research showed that workers valued retirement benefits as an income stream over a cash sum, with more than half (58 per cent) planning to take retirement benefits totally or primarily as an income.

A quarter (25 per cent) were interested in taking their pension savings totally or mainly as cash.

More than eight in 10 (81 per cent) of those surveyed valued an income in retirement that would be guaranteed for life, with two-thirds feeling favourable towards an income that kept pace with inflation.

“These additional statistics show that it is vital that the government ensures that savers are given appropriate support and education to save for retirement in an era when it is likely that state pension benefits will only become available in an individual’s eighth decade,” Box concluded.

---