WEALTH at work, is urging people to check their pensions and be aware of the cost of delay when reviewing contributions and retirement plans. Put simply, this means checking whether you're saving enough for retirement now, rather than putting it off and potentially missing out on years of pension growth.

Increased living costs mean that pension savings may not be a priority, and some people may put retirement planning on hold altogether. However, this could have significant implications.

Research conducted by WEALTH at work among 2,000 UK workers with a defined contribution pension found that more than four in five (83%) are concerned living cost pressures will leave them less comfortable in retirement due to a shortfall in pension savings, up from 81% last year.

Concerns are particularly strong among younger workers, with almost half (46%) of 18 to 24-year-olds and more than two-fifths (41%) of 25 to 34-year-olds saying they believe they will never be able to afford to retire. This compares to an average across all ages of 38%.

Why the cost of delay when saving for retirement matters

When it comes to retirement saving, time is one of the most valuable assets. Starting early gives pension contributions longer to benefit from investment growth and compounding, whereas delaying means people may have to contribute significantly more later to achieve the same retirement outcome.

If someone aged 25 contributed a total of £2,400 per year into their workplace pension for 30 years (including both employer and employee contributions), they could build a pension pot worth £167,426 by age 55, assuming a 5% annual investment return. However, if they delayed saving for 10 years and only started contributing at age 35, they would need to contribute £4,825 per year for the remaining 20 years to reach a similar pension pot of £167,520 by age 55.

This illustrates the cost of delay: waiting 10 years more thandoublesthe annual contribution required to achieve a similar outcome. The impact can be significant because delaying contributions may mean missing out on employer payments, tax relief and years of potential investment growth.

For younger workers already under pressure from day-to-day costs, starting early can help make saving feel more manageable and gives pension savings more time to grow and benefit from the power of compounding. For example, someone in their 20s, saving just 1% more each year into a workplace pension can boost future savings by 25% in retirement if their employer was to match this.

People who are saving into a pension also need to check whether their current level of contributions are likely to be sufficient to achieve the sort of retirement they are hoping for, particularly if they started later or have gaps in their contributions.

Jonathan Watts-Lay, Director, WEALTH at work, comments: “There are currently around 15 million people in the UK who are under saving for retirement, and this could rise to 19 million without action.

“Pension Awareness Day is an ideal opportunity to turn concern into action. By providing clear and tailored financial education, employers can help their employees to see the value of their workplace pension. This includes what the employee is paying, what the employer contributes, and how small changes could improve future outcomes.

He adds: “Retirement may feel a long way off, but the earlier people engage with their pension, the more time their savings have to grow. Many don’t realise the significant difference a small increase can make, particularly when an employer offers contribution matching. Finding a little extra today may feel challenging, but small changes such as budgeting, reviewing regular bills, and making use of workplace benefits can help people free up money for their future.”

He adds: “Employers have an important role in making support accessible, practical and relevant. Taking an active approach and supporting employees with financial education and guidance from reputable firms can make support provided far more robust. Ultimately, empowering your people by providing them with access to the appropriate support at the right time can result in better outcomes for all.”

To help, here are five steps to empower employees to engage with their pensions:

1. Offered tailored support: Make it relevant by tailoring financial education to where employees are in their lives. For younger employees, focus on how pension schemes work, contribution levels, the cost of delay, tax relief and the impact of compounding. For mid-career employees, include retirement targets, investment choices and whether savings are on track. For those approaching retirement, cover income options, tax, scams, potential consolidation and access to investment advice.

2. Make pensions simple, visual and jargon-free: Employees often need clear explanations of how pensions work, what they and their employer pay in, where money is invested and what it could mean in retirement. Interactive workshops, short videos, calculators and personalised examples can make the message easier to understand and more memorable.

3. Offer financial guidance sessions: One-to-one financial guidance or coaching sessions can be particularly useful for those who need a deeper level of knowledge around their pension options, which is especially relevant for those at retirement. These could be delivered via a video call or via the telephone and can help people understand.

their options, identify potential next steps, and decide whether they would benefit from further support.

4. Give employees practical next steps: Engagement should lead to action. Encourage employees to check their current contributions, review whether they have more than one pension pot, consider their retirement income goal and know where to go for support. Simple checklists can help employees turn awareness into healthy habits and behaviours.

5. Bring in specialist support: Many employers and trustees are now working together with financial wellbeing, retirement and workplace savings specialists to help individuals engage with their pensions and savings throughout their career. If bringing in external support, due diligence should include workplace expertise, adviser qualifications, regulatory record, compliance processes and pricing structure.