“Consider the potential impact” of reducing pension payments

Those thinking of reducing their pension contributions should carefully consider the consequences before making a decision, an independent financial advice firm has warned.

Recent research by uSwitch.com revealed 42 per cent of Britons have cancelled their insurance or pension contributions to improve their debt management and Adrian Lowcocks of Bestinvest has urged those thinking of doing the same to consider the impact of such an action.

“The issue for anyone is if you cut pension contributions, obviously it can impact on the potential size of the portfolio or your pension at the end of its life span,” he explained.

However, he agreed that those facing the possibility of increasing debt by continuing to make payments should consider the move, adding that mortgage payments “do need to take priority”.

Life Trust Insurance’s recent Cost of Retirement report revealed retiring costs the typical UK household £413,000, while an individual living alone can expect to need £326,700.