Half (50 per cent) of permanent workers in the UK would increase their workplace pension contributions if their employer paid a greater share, according to Scottish Widows.

Its Retirement Report found that 34 per cent of workers would be willing to contribute 6-8 per cent of their salary if minimum contribution rates rose in future, while 20 per cent would be willing to contribute between 8 and 10 per cent.

Two thirds (66 per cent) of permanent workers were in favour of employer contributions being increased, while 42 per cent wanted minimum employee contributions to be raised.

Workers in their 20s were more likely to be in favour of employer contribution increases (68 per cent), although appetite remained strong among older workers, with 61 per cent of over-50s in favour.

However, cost pressures were affecting employer action, with 54 per cent of companies being held back from increasing contributions by financial constraints.

While many workers wanted increased contributions, the report highlighted a lack of understanding around pensions, with 41 per cent not knowing how much they contributed each month.

Almost a fifth (19 per cent) thought their employer did not contribute to their pension, while 30 per cent said they did not understand how pensions worked.

Over a third (36 per cent) did not know how much they should be saving and 26 per cent were unsure of what to do with their money.

Scottish Widows also raised concerns around low confidence and engagement, with 42 per cent of workers lacking confidence in managing their pension pots and 52 per cent having done little to no research into how much they will need for retirement.

"Automatic enrolment has been a real game changer for how Britain is building pension wealth, bringing millions of people into pensions who wouldn’t have saved otherwise,” said Scottish Widows managing director, workplace and intermediary wealth, Graeme Bold.

“But the next phase is a challenge, as while half of workers are ready to put more aside if their employer steps up too, but businesses are already up against financial pressure across the board.

“The reality remains that too many people are still at risk of falling short in later life, with around a third facing a financial struggle in retirement. Most people save for retirement through their employer, making the workplace crucial to helping close the gap.

“Industry, government, employers and all of us need to be in the game here to help people build better financial futures. Increasing default contributions from employers and employees will be a big part of making this happen, but people must also understand what they have, if it’s enough and what steps they can take to plug any shortfall over time.”

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