People who choose to work part-time to achieve a better work-life balance are not considering the impact on their pensions, experts have warned.

A recent survey by I&O Research found that 70% of people who cut their working hours did not investigate the consequences for their retirement planning beforehand.

Around 45% of the working-age population have chosen to reduce their working week, either to concentrate on caring responsibilities, hobbies, their own well-being or because they can live on a lower income.

But pension specialists say that working less can have a severe impact on people’s retirement income.

Lisa Brüggen of Netspar, Tilburg University’s network for studies on pensions, ageing and retirement, said: “A lot of people are insufficiently aware that financial choices they make now have financial consequences for later.

Focus on now

“If you’re an employee in construction and decide at the age of 32 to work one day a week less, you build up around €27,000 less for your pension. In concrete terms that means you have around €120 a month less to spend when you retire.”

Chrisitaan Meijer of Wijzer in Geldzaken, the finance ministry team that commissioned the study, said: “The focus is often on whether people can make ends meet now, rather than after they retire.”

Another focus of concern is that many couples have made no arrangements to split their pension investments if they separate or divorce.

Three-quarters of people who responded to the survey believed they would “work things out” if they would break up, but Wijzer in Geldzaken says disputes between estranged partners over pensions often end up in court.

Brüggen added: “Research tells us that a large number of women say they are not financially independent and don’t know where they stand financially beyond their household expenses, and certainly not when it comes to their old age.”