The final value of any pension pot comes from two factors: the amount you have paid in, plus the growth that you achieve on that money. In the first 30 years of saving, more than half the total value of a pension comes from pension contributions.

However, in the last 10 years, the relative importance of contributions versus investment returns switches as savers approach retirement. In these years, analysis from Aegon shows the biggest boost comes from investment returns. This can account for a third of the final value of the pension. This happens because the pension pot is larger and therefore an increase of one or two percent in value can be equivalent to thousands of pounds.

Aegon investment director, Nick Dixon said: “In the early years of saving, contributions are likely to have the biggest impact on retirement savings, so saving more or saving earlier might be a good idea for those who can.

“In contrast, the fortunes of those who are ten years pre- or post-retirement are likely to be heavily reliant on investment returns. These investors should review investments regularly, and may need financial advice. It’s important to remember that investment losses will have as big an impact as investment gains.

“In later retirement, where retirement savings are now depleted, the size of income payments may again have a greater impact than investment returns.”

What does this mean for those saving for a pension? The old rules still apply: Starting early is vitally important as it enables you to get the maximum benefit from compounding. However, these results argue against moving into very low risk assets ahead of retirement, particularly if you do not want to buy an annuity.

If you are looking ahead to retirement, a one-off session with a financial adviser can help you decide on the right path. The new Pension Advice Allowance, first announced at Autumn Statement 2016, enables people to withdraw £500 from their pension pot on up to three occasions to take financial advice.