The majority (76 per cent) of people are unaware that they can pay money into someone else’s pension, whilst even those who are aware are unlikely to consider doing it, research from Nucleus has revealed.

The survey found that 8 per cent of savers were previously aware of third-party contributions but would not consider paying into someone else’s pension, while 12 per cent were unsure when asked about their awareness of pension contributions.

In contrast, 4 per cent who were aware of the possibility said they would consider making contributions for someone else or have already done so.

Of those who did not know about the possibility of third-party pension contributions, 55 per cent said they would not consider making any, while the remaining 21 per cent in the unaware group were more inclined to think about adding to another person’s pension instead of or in addition to their own.

Nucleus also found that, overall, more women (79 per cent) than men (74 per cent) were unaware about the possibility of paying into someone’s pension and a higher proportion of female respondents were less likely to consider doing it.

Indeed, the survey found that whilst almost a quarter (24 per cent) of men who did not know said they would consider making third-party contributions, this figure dropped to 19 per cent for women.

However, Nucleus argued that third-party contributions can be a useful financial planning tool, particularly for someone who has taken a career break, such as to raise young children or care for elderly relatives.

The current rules allow for up to £2,880 per year to be paid into a pension of a non-earning person, while tax relief tops up the amount to £3,600.

Nucleus showed that, if five payments of £3,600 (including tax relief) were paid into someone’s pension from age 35, assuming growth of 4 per cent a year net of charges, this would provide them with an additional fund of approximately £61,000 at age 67.

Contributions can also be made even if the partner is working, providing the amount remains below their annual allowance.

Nucleus stressed that this option is not limited to spouses, pointing out that parents or guardians could set up a pension for a child to give them a head start for saving for their future. Other family members would also be able to contribute in a tax-efficient way.

Commenting on the findings, Nucleus director of business development, Laura Barnes, said: “Sadly third-party pension contributions appear to be a closely guarded secret.

“Families could be missing out on a more comfortable retirement if they are not aware of the possibility of paying into someone else’s pension or receiving contributions from another person.

“Worryingly, even when people are made aware, the majority say they would not consider doing it, our research suggests. There could be many reasons for this including affordability concerns, lack of personal planning and being put off by constant changes to the pensions system.

“For others it may be a case of them not feeling fully informed or understanding the benefits.

“Generally speaking, a greater number of women could see their retirement prospects improve if the family unit considers third-party contributions. Often caring roles have fallen to women in the past and this has impacted their earning power either because of working part-time or giving up work entirely.

“If these women were to receive pension contributions from a partner it could go some way to reduce the gender pensions gap, which currently stands at 35%.

“Private pensions play a huge role in retirement income but on average women would need to work for almost two decades more to retire with the same pension amount as men.

“Shouting more loudly about pension contributions – both personal levels and third-party contributions could be a step in the right direction.

“There’s work to be done to increase awareness and to make this secret common knowledge.”

This is not the only pensions issue savers have expressed uncertainty about, as previous research from Nucleus also found that the majority of adults (71 per cent) believe the state pension will not exist or will be less generous when they retire.

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