Small changes to the amount of money you contribute to your pension can have a big impact on your retirement outcome, analysis by Standard Life reveals.

Based on a 22-year-old starting full-time work on a £25,000 salary with a 3% employee pension contribution (5% from the employer), this employee would amass a total retirement fund of £434,000 at the age of 66.

This calculation assumes a number of points, such as the worker getting a 3.5% salary increase each year; 5% investment growth a year; an annual management charge of 1% and zero inflation.

However, it gives you an illustration of figures which could potentially be achieved by sacrificing some of your pay now, for a larger future retirement income.

When applied to a higher contribution rate, say an extra 2% so the employee actually pays in 5% which is matched by the employer’s 5%, based on the same assumptions, they would accumulate £542,000.

So, a 2% boost could see you better off in retirement to the tune of £108,000, Standard Life suggests, helped by the magic of compound interest – i.e. interest on your interest.

If you really want (and can afford) to boost your pension contributions further, Standard Life lists these illustrations:

Pension savings really pay off

Dean Butler, managing director for customer at Standard Life, said: “It’s amazing to see how a relatively small increase in contributions can significantly boost the pension you retire on by tens of thousands of pounds. While pension payments may not be the top priority when you begin your career, or when finances are feeling squeezed, it will pay off in future. If your finances and your circumstances allow, even a slight increase in the contributions you make to your pension, will help boost your retirement outcome.

“For those in a position to do so, consistently paying into a pension from as early an age as possible and topping up payments, especially in your 20s, 30s or early 40s, can make a massive difference over time. Some employers will also match the contributions you make, giving your pot a further boost. So if you’re able to save into a pension and increase your contributions above the standard levels, your future self is likely to thank you for it.”