More than one in eight (13 per cent) UK workers have reduced, paused or stopped their pension contributions over the past 12 months amid continued cost-of-living pressures, according to research from Penfold.

The workplace pension provider found that 3.5 per cent of workers had paused or stopped them altogether.

However, 64 per cent said they had maintained their contribution levels despite wider financial pressures.

The findings, published as part of Penfold’s latest The UK Pension Gap report, highlighted what the provider described as a "growing tension" between meeting immediate financial needs and saving adequately for retirement.

Penfold warned that, while automatic enrolment had significantly increased pension participation, many savers still lacked sufficient visibility over how changes to contributions could affect their eventual retirement income.

Its research also revealed that 43 per cent of surveyed workers were not confident they would achieve a comfortable retirement.

Penfold CEO and co-founder, Chris Eastwood, said: “It’s completely understandable that people reassess their finances when household budgets are under pressure.

“For some, reducing pension contributions can feel like one of the few available options when balancing rising costs with everyday spending.”

However, Eastwood warned that the long-term consequences of reducing contributions may not be immediately obvious to savers.

“Too often, pension saving remains disconnected from people's day-to-day financial lives, and many savers lack the visibility needed to understand how today’s choices could affect their future retirement income," he noted.

The findings come amid broader industry concerns over retirement adequacy, with the Pensions Commission identifying undersaving as a key challenge for future retirees.

Penfold also pointed to the development of pensions dashboards as a potential means of improving visibility, by allowing savers to see more of their retirement provision in one place.

Eastwood argued that improving access to information and support throughout working life could help people make more informed decisions when weighing up short-term financial pressures against long-term retirement outcomes.

“Pensions should be an active part of someone’s financial wellbeing, not something they only think about when they are approaching retirement,” he added.

“Giving people clearer information and support throughout their working life can help make that possible."

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