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, calculations suggest.
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, pensions provider Standard Life calculated. 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 - which would be 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.
