By Max Clarke
Contributions to personal pensions have dropped 15% in 2 years as a result of the recession and current downturn, figures from the Office for National Statistics show.
The drop of £2 billion from 2007/8 to 2009/10 came at a time of worsening economic conditions, as individuals stopped making small contributions to their personal pensions.
Personal pensions are currently the only form of pension provision for the self-employed. The drop in contributions reflects the broader erosion of disposable incomes, as individuals divert funds to meet the rising costs incurred by the high retail prices inflation.
Muted wage growth, combined with rising prices is having a marked effect on separate areas of the economy, most significantly on the high street where consumers are avoiding making unnecessary purchases, fuelling widespread retail decline.