According to Punter Southall Financial Management, employees are effectively turning down thousands of pounds of their remuneration packages by not contributing to their defined contribution pension early enough.

Furthermore, delaying individual DC pension contributions by ten years could reduce annual retirement income by 20 per cent.

Damian Stancombe, head of employee benefits at Punter Southall Financial Management, says, ‘In the current defined contribution pension world, the average contribution is six per cent.

‘It is vital that employees recognise that any employer pension contribution is a key part of their total remuneration package and that, essentially, a six per cent pension contribution is a six per cent pay rise. How many employees would turn this down in today’s market if it was conveyed in this simple manner?’

According to Stancombe, if a 30-year-old started to contribute immediately, his eventual pension would be almost 20 per cent higher than if he delayed joining the pension until he was 40; and he points out that ‘At a time when the future of many individuals’ finances looks uncertain, employees should be taking every opportunity to enhance their future income.’