The number of people blaming low income as a reason for not contributing into a pension is increasing, according to analysis from Equiniti.
The research from the pension administration firm, based on figures from the Office for National Statistics (ONS), showed 55 per of people in 2016/17 said either low income, lack of work or still being in education were to blame for not saving into a pension.
This was an increase of 17 percentage points from the 38 per cent of people who cited this as a reason in 2010-2012, the firm said.
Equiniti said disposable income was crucial to pension saving, with a third of respondents saying they couldn’t afford to contribute in general, and 18 per cent had too many other expenses.
Chris Connelly, propositions and solutions director at Equiniti, said the findings emphasised pension saving was one of the first outgoings to be cut when money was tight and was not prioritised.
He said: "However, with the state pension unlikely to sustain a good standard of living in retirement, it is absolutely crucial that people do put away money for later life whenever they possibly can – particularly given the additional payments that employers will make in workplace schemes.
"Auto-enrolment has been a fantastic stimulus in getting people to save and keeping them contributing on a monthly basis.
"The low opt-out rates perhaps even indicate that while many people think they cannot afford to put away a portion of their salary each month, when this decision is processed automatically the reality is that they are still able to make ends meet."
Several workplace pension providers have disclosed low opt-out rates after the increase in minimum contributions from 1 to 3 per cent for the employee in April.
Legal & General Investment Management (LGIM), for example, registered an opt-out rate of just above 3 per cent in April and below 2 per cent in May.
Equiniti also analysed knowledge of pensions, with 13 per cent of respondents saying they did not know enough about them to contribute financially.
Some 39 per cent also said they didn't understand enough about pensions to make decisions about saving for retirement.
Mr Connelly added: "At present, people don’t understand a pension: [they] don’t value the benefit and it is not seen as a priority which is naturally going to lead to the conclusion that the monthly contributions could be better utilised."
He said the proposal from the Pension & Lifetime Savings Association to introduce retirement income targets in the UK would be a great idea, as it would get people to focus explicitly on how much they need to put away before retirement, to plan ahead financially and increase support through the accumulation period.
He added: "Until people value the benefits of building up retirement savings (for example, the ability to stop working earlier or travel more in retirement) then it will remain bottom of the list when the monthly pay packet comes in.