The Daily Observer London Desk: Reporter- Victoria Smith
Nearly one in three people are spending savings or pensions sooner than planned to keep up with household bills, new research suggests.
More than half of adults of all ages say the rising cost of living is their most pressing financial worry, followed by running out of money and not saving enough for old age.
Two out of five said money is the issue most affecting their mental health, and one in three experienced a negative shock to their finances over the past three years, according to an annual pension survey by Interactive Investor.
More than half of adults say the rising cost of living is their most pressing financial worry
The research, which saw 9,000 people questioned about their finances, was published after official data showing the inflation rate remained at 6.7 per cent for the second month in a row.
The most common events threatening people’s finances are their own or a family member’s illness, followed by redundancy and caring responsibilities.
Interactive Investor found 58 per cent of adults aged under 66 have had to stop saving or save less, and nearly one in four would like to save more into a pension but cannot afford the extra contributions.
‘The cost-of-living crisis is undermining retirement futures. It is strangling retirement savings,’ says Alice Guy, head of pensions and savings at II.
‘It is forcing people to postpone their retirement dreams. And it is causing many savers – whether retired or not – to look anxiously at their pensions and savings, worrying if they will be enough. Most of us are being affected in some way.’
But Guy points to a couple of positive findings, saying: ‘In general, older people appear to have been less affected by the cost-of-living crisis than younger generations.
‘Most have paid off their mortgages, many have built decent retirement savings pots, and they all enjoy the benefit of the triple lock on the state pension element of their retirement income.’
