Hard-pressed savers cut pension contributions

By Jennifer Hill

LONDON (Reuters) - Britons have cut their pension contributions by almost half in the past year as prices rise and credit becomes harder to obtain.

On average, people paying into private and company pension schemes have reduced their monthly contributions by 48.3 percent, according to research by Prudential.

Its "retirement savings report" shows that non-retired adults are paying an average 144.57 pounds per month into pension funds, down from 279.38 pounds a year earlier.

It also reveals that 55 percent of non-retired people are not contributing at all to private or company pension schemes.

The research comes at a time when consumers are feeling the pinch from the credit crunch, an end to cheap and easy credit and rises in the cost of living.

Chris Grayling, Conservative work and pensions secretary, said: "This is hugely disappointing, but unsurprising.

"Given the damage to our pensions system under Gordon Brown, it is little wonder that people are more and more unlikely to save."

Then Chancellor Brown scrapped tax credits on share dividends paid into pension funds in his first Budget in 1997.