The Office of National Statistics has reported in their Pension Trends that total contributions towards personal pensions fell markedly between 2007/08 and 2009/10.

During the period contributions fell from £20.9 billion to £18.7 billion, which has been put down to a sharp fall in the total number of people making small contributions to their pensions, including stakeholder pensions.

Although the total contribution fell about 10.5%, about one in six (or 16.7%) of contributors stopped paying indicating that those paying the least in were more likely to stop paying.

With the immediate concerns of rising inflation it is obvious that those on the lower earning scales will need to prioritise their income to today’s needs. Especially if they are self employed and suffering in the downturn.

Then there are the indifferent returns that pensions receive at the moment due to that very same recession. Just recently billions were wiped out of pension funds when the FTSE took a tumble. Not good for peoples’ confidence in saving, especially when the fund managers still take whopping great bonuses.

This of course will leave a shortfall when they retire.

But saving can be a risky business. Put it in a safe at home or under the mattress then you run the risk of thieves in the night. Put it into a financial product and you run the risk of fee hungry bankers and revenue hungry politicians; the thieves that come by day. Buy commodities such as gold and you have storage fees and inflation to contend with. And who can afford to buy a sufficiency of property to live on when they retire?

Then there are the stories of the spendthrifts who end up with a state provided pension as large as the people who sacrificed and saved hard, so why save? Goes the thinking. And local government will snaffle your savings and house to pay for care home fees anyway.

Yes, people should save for their retirement, but take a good hard look around and ask yourself, ‘who am I going to trust to look after my money for the next few decades?’

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