New calculations from Wealth at Work reveal that increasing your pension contribution by just 1% of your salary could boost your pot by 25% – if your employer is willing to match it, and you start as early as possible.

Under auto-enrolment rules, all workers aged 22 and over who earn more than £10,000 a year, must legally be enrolled into a workplace pension scheme.

Employees must contribute a minimum of 5% of their salary, while employers are required to pay in at least 3%.

However, these are just the minimum amounts – both staff and bosses can contribute more.

Jonathan Watts-Lay, director of Wealth at Work, said: “Many don’t realise the difference a small increase in their pension contributions can make if they start in their 20s, compared with starting in their 30s or 40s; especially if their employer offers to match it.”

For example, Charlie, 25, earns £25,000. At the moment, he contributes the minimum into a pension – 5%, and his employer pays 3%. This means his pot at 68 would be worth around £124,177.

If he increased his contribution by 1% to a total 6%, an extra £250 per year would go into his pension, but the personal cost to Charlie would only be £170 due to the pension contribution being taken before tax or National Insurance are deducted

The total pension contribution is now 9%, and the pension pot value is estimated to increase to £139,699 – an increase of £15,522.

However, if his employer were to match his 1% increase, the total pension contribution would be 10%, and the pension pot value is estimated to increase to £155,221 – an overall increase of £31,044.  This is more than a 25% increase of the original pot.

Watts-Lay said: “The bottom line is that we all need to be saving more for our retirement, not just those who are retiring in the next few years.

“If you can afford to put an extra 1% of your salary into your pension, it will make a significant difference, especially if you start early, and if your employer will match it.”