UK - With the UK economy now in recession and the downturn getting worse, saving into company pensions has become less of a priority for individuals, according to Towers Perrin.
Towers Perrin principal David Bird said: "Rather than seeing the economic downturn as a reason to stop saving altogether, employees need to take a calm look at how they are preparing for retirement, whether they are using a pension or another form of saving."
Bird added that employers also needed to consider how their staff would be affected by the economic downturn.
He said: "Sponsors need to understand that employees investing in a defined contribution scheme are worried. They won't know whether their savings are safe, and whether they are doing the right thing."
Bird suggested employers should consider giving much more flexibility to employees about how they plan for retirement and help their staff understand that a traditional company pension plan may not be the best option in all cases.
He said: "Flexibility might include offering employees who are struggling a temporary pensions holiday; allowing them to get their finances in order without withdrawing from pensions saving altogether."
A British Chambers of Commerce (BCC) survey released today revealed domestic balances and sales had moved deeper into negative territory and there had been a huge collapse in confidence across different sectors.
The BCC said that if the government and the Monetary Policy Committee acted immediately to return confidence to UK companies, a major recession could be avoided.
BCC director general David Frost said: "We are clearly in a very difficult economic period but it is important that we retain a sense of proportion.
"Confidence is critical and it is vital that businesses are shown leadership."
Economic adviser to BCC David Kern added: "Overall, the alarming Q3 results point to worsening dangers of major economic downturn and rising unemployment. The results support the view that a UK recession has started and the downturn is getting worse.
"The mounting global banking crisis reinforces our view that immediate threats to growth are more critical than dangers of higher inflation. Without forceful and urgent corrective action, there is a serious danger that the recession will deepen and cause huge damage."
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