Hard-pressed savers cut pension contributions

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On average, people paying into private and company pension schemes have reduced their monthly contributions by 48.3 percent, according to research by Prudential.

Its "retirement savings report" shows that non-retired adults are paying an average 144.57 pounds per month into pension funds, down from 279.38 pounds a year earlier.

It also reveals that 55 percent of non-retired people are not contributing at all to private or company pension schemes.

The research comes at a time when consumers are feeling the pinch from the credit crunch, an end to cheap and easy credit and rises in the cost of living.

Chris Grayling, Conservative work and pensions secretary, said: "This is hugely disappointing, but unsurprising.

"Given the damage to our pensions system under Gordon Brown, it is little wonder that people are more and more unlikely to save."

Then Chancellor Brown scrapped tax credits on share dividends paid into pension funds in his first Budget in 1997.

Those saving for retirement expect to draw an average annual pension of 22,504 pounds per year, the Pru research shows. Men expect a higher amount of 26,355 pounds.

But the insurer warns that to achieve an annual pension of 22,504 pounds, a 20-year-old man would have to save 286 pounds per month until the age of 65, and a 20-year old woman 413 pounds until the age of 60, giving a total pension pot of around 326,000 and 341,000 pounds respectively.

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