New calculations from Standard Life suggest that people who pause their workplace pension contributions for just a year due to cost of living pressures may end up thousands of pounds worse off in retirement than if they had continued.
The pension provider calculated that someone who started working with a salary of £25,000 per year and paid the minimum contributions from the age of 22 could end up with nearly £457,000 in retirement funds, but if they paused at the age of 35 for just one year, they could end up with just over £444,000 by the age of 68 instead - nearly £13,000 less than if they had continued to pay in.
Someone stopping for two years could end up around £25,000 worse off in retirement and someone pressing pause for three years could be nearly £38,000 short of what they may otherwise have accumulated. The calculations were based on various assumptions, including certain levels of investment growth, salary growth and annual charges.
