Nearly 40 per cent of defined contribution pension scheme members are failing to take advantage of pension contribution matching from their employers to the sum of £225m per annum.
According to research by Xafinity Consulting, younger members of the schemes are the least likely to gain maximum employer contributions which Xafinity says indicates a degree of financial ignorance.
But the pensions consultancy also puts it down to low disposable income and Xafinity suggests that if members were encouraged to make lower matched contributions more employees may be encouraged to join the scheme.
Xafinity Consulting director Pat Wynne says: “Individuals need to be encouraged to think about the level of income they will require in retirement, making use of modeling tools to calculate how much and when to save, taking into account their attitude to risk and when they wish to retire.
“This may in fact mean making contributions greater than the employer is prepared to match.”