More than half (51 per cent) of non-retired workers think that workplace pension contributions should increase, amid signs that the cost-of-living crisis could be easing, analysis from the Pensions and Lifetime Savings Association (PLSA) has revealed.

The survey suggested that there has been a modest easing in cost-of-living pressures for some, as the proportion of UK savers reporting being financially worse off than they were 12 months ago has fallen from 44 per cent to 34 per cent in the past year.

In addition to this, just over a quarter (27 per cent) have seen an improvement in their financial position in the past 12 months, while those reporting no change remained steady at 39 per cent.

The PLSA also found that whilst some (41 per cent) are feeling the pinch and making cuts to their everyday spending, payments into pensions were the expenditure area least likely to have been cut, with around one in 10 reporting they had reduced or cut private pension (13 per cent) or workplace pension payments (11 per cent).

And despite affordability concerns, there was strong support for higher automatic enrolment (AE) pension contributions, as around half (51 per cent) of those not retired think the minimum contribution for workplace pensions should rise from the current 8 per cent to 12 per cent to ensure people have more savings for retirement.

In addition to this, many believe contributions should be bolstered more by employers, with nearly half (45 per cent) arguing that contributions should be split equally, while a further 43 per cent argued that employers should pay more than employees.

Workplace pensions were not the only area savers had adequacy concerns, however, as the PLSA found that 52 per cent of employees believe that a full state pension will not provide enough to enable them to avoid poverty in retirement.

In addition to worries around the value of the state pension, 62 per cent of respondents were worried the state pension age will rise before they retire, highlighting concerns that inflation and other economic pressures could eat away the value of the state pension and push retirement further out of reach.

Given this, a strong majority (73 per cent) agreed that the state pension should increase in line with the triple lock, and 76 per cent said that increases are necessary to prevent a decline in living standards for pensioners.

Commenting on the findings, PLSA chief policy counsel, Nigel Peaple, argued that "it’s essential that we act now to ensure people have enough savings for a secure retirement".

Despite these adequacy concerns, around half (52 per cent) of DC savers said they trust their pension scheme to invest in the right way to get the best returns for their savings.

However, while around three quarters (76 per cent) of defined contribution (DC) pension savers know that their pension money is invested, around seven in 10 (72 per cent) do not know what their pension is invested in.

There was a desire to help support UK companies through pension investments, as 44 per cent of workers said they would prefer their pension investments to include lending money to the UK government to help fund public services like the NHS and schools, and 54 per cent prefer their funds to support UK companies rather than companies overseas.

However, this desire to support UK companies does not necessarily hold if it comes at the cost of returns, as nearly two thirds (65 per cent) think that pension providers should continue to invest for the best possible returns, regardless of whether the investments are in the UK or overseas.

In addition to this, 39 per cent of respondents opposed government intervention in dictating where pensions are invested.

Peaple agreed that while there is a desire among savers to see pension investments supporting UK companies and public services, this should not come at the cost of lower returns.

"Achieving the best possible returns must remain the priority, whether those investments are in the UK or overseas," he stated. "We ask that the government strikes the right balance between supporting domestic growth and delivering strong returns for savers."

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