Many Brits considering using their pension to help with cost-of-living crisis

Almost one in four Brits are considering withdrawing their pension savings in order to survive the cost-of-living crisis, finds a new report.

However, after compiling these findings, Aviva is urging people to weigh up the pros and cons.

According to the Aviva research, 23% of people with a pension are thinking about withdrawing money from it, opting out of automatic enrolment, or planning to reduce, pause or stop their contributions in a bid to help ease their financial situation.

This figure rises to 42% for 16–24-year-olds and 38% for 25–34-year-olds who are likely to act to relieve their current financial situation.

Interestingly, there also seems to be a distinct gender gap – 28% of men plan to take one or more of these actions, compared to 18% of women.

Alistair McQueen, Head of Savings and Retirement at Aviva, said, “When times are hard, we understandably try to find ways to cut costs, so considering your savings is an obvious thing to do. But it’s important to weigh up the pros and cons when it comes to your pension.

“Pensions carry unique financial benefits that cannot be replicated elsewhere. For example, if you are in a workplace pension, it is very probable that your employer will be contributing too.

“If you stop saving, your employer will probably stop with you, and this boost will be lost. Pension saving also benefits from tax relief. Stop saving, and tax relief will stop at the same time. It’s important to understand these other benefits when you are looking at your pension.

“Many modern pensions give you great control over how and when you save. For example, you can often stop, start, increase, or decrease the amount you save, as and when you want.

“And from the age of 55, there is great control of how and when you access your savings. The benefits of these simple flexibilities are more valuable than ever during these difficult times. However, it is important to consider all options and take advice if possible.”

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