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Savers cut pensions contributions

Pensions donations are being scaled back by consumers affected by the credit crunch, Prudential has revealed.

Average monthly contributions into private and company schemes have dropped by 48 per cent.

Prudential said that £280 was being paid into these schemes each month a year ago - a figure which has now dropped to just £146.

Rising loans repayment rates and inflation on goods and services - both directly resulting from the credit crunch - have been blamed for the trend.

Managing director at Prudential Gary Shaughnessy said: "With rising prices and a squeeze on savings, reducing pension contributions may look like an attractive short-term option, but the reality is that continuing to save as early as possible is vital if people are to build a pension pot large enough to maintain their lifestyle in retirement.

"We always encourage people to look at their wider wealth portfolios [in] the current uncertain economic conditions."

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