Half (50 per cent) of workplace pension savers have never considered increasing their pension contributions with their current employer, despite 48 per cent understanding how to do so, according to research from the Pensions and Lifetime Savings Association (PLSA).

The PLSA said the findings highlighted a “troubling disconnect” between pensions awareness and behaviour.

While nearly half understood the process of changing contribution rates, 28 per cent said they did not know and 24 per cent were unsure.

The study found that pay rises contributed to savers’ appetite for contribution increases, with 42 per cent stating they would consider raising their pension contributions depending on the size of the pay rise, while a further 27 per cent were ready to make additional contributions regardless of the size of the pay increase.

Delving into saver demographics, the PLSA highlighted “stark differences” in pension engagement depending on age, gender, and income.

People aged 18-34 were more likely to increase contributions if they got a pay rise (37 per cent) than those aged 55 and older (20 per cent).

However, the biggest gap was amongst different income cohorts, with 41 per cent of higher earners considering contribution increases compared to 16 per cent of low income pensionholders.

Men were more likely to have considered raising their pension contributions (52 per cent) than women (40 per cent), and were more likely to say they knew the process (55 per cent) than women (39 per cent).

“This research underscores the gap between knowledge and action when it comes to pensions,” commented PLSA director of policy and advocacy, Zoe Alexander.

“People understand the need to save more, they know how to do it, they even want to do it, but for many, it simply doesn’t happen.

“The reality is that many individuals are putting off important pension decisions because they feel overwhelmed by today’s financial pressures or are unsure about how to make the changes.

“More needs to be done to help people take the next step - whether it’s through better education, clearer communication, or making pension adjustments more automatic.

“Pensions can feel like a distant concern, but that attitude is leading to poor outcomes down the line. Those with DC pensions are more likely to need to take positive action themselves to secure the retirement they expect, as the default 8 per cent savings rate may fall short.

“Small actions, like reviewing investments, slightly increasing contributions, or maximising employer matching, can significantly impact long-term outcomes.

“However, employers and policymakers need to consider clearer guidance and behavioural nudges to help people act sooner rather than later. The process needs to be as simple and straightforward as possible, and we need to help people make their pension savings a more immediate priority, especially if they have the ability to save more.

“Without addressing this disconnect, many people will continue to miss out on the retirement they hope for.”

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