Government 'must take action on pension contribution'

The government should consider further reforms to the pension system amid findings that have proven savers are reducing how much they put aside for retirement.

That is according to Age UK, who were responding to figures from the Office of National Statistics, which showed pension contributions have dipped by more than £2 billion in two years.

While it is understandable that a reduction in contributions has happened during such economic pressures as have been seen since 2007, the organisation believes the extent of this dip is "extremely worrying".

Michelle Mitchell, Charity Director at Age UK, said: "Too many people are devastated when they retire as the gap between expectations and the reality of what they will actually receive for a pension is realised."

However, an upside to this is that automatic enrolment, due to come into effect next year, will mean savers will benefit from an obligatory contribution expected of most employers.

Ms Mitchell added: "It is critical that the government act now to ensure that adequate information and advice is available.

"Reform is also vital to help people coming up to retirement who may need to buy a retirement income in the form of an annuity."

Posted by Liam Tomlinson