AXA: Pension breaks should be last resort

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AXA: Pension breaks should be last resort

Research released today by AXA shows that as many as 1.5 million people are planning to take a break from their pension fund contributions, in order to help them through dark economic times.

But the pension provider warned that stopping contributions to pension funds should be a last resort for people struggling with the credit crunch, as doing so could leave them considerably worse off in the long run.

Of the one in twelve people who said they had plans to take a 'pension holiday', 53 per cent said they would do so because of the increase in the cost of living and a further 13 per cent cited credit crunch-induced debts as their primary motivation.

Steve Folkard, head of pensions and savings policy at AXA, said: "Taking a pension break should be a last resort because of the long term repercussions.

"You [could] have a pension pot that is tens of thousands of pounds short when you retire."

Last week the Alliance Trust reported that as property prices continued to fall, increasing numbers of people will be relying on their monetary pensions to fund them through their retirement.

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