A deeper understanding of tax efficient pension plans could encourage people to save more for retirement, according to a new study.

Research by Standard Life found that 77 per cent of people aged 18 to 65 who are not actively saving into a pension were unaware that for every £4 they invest the Government contributes another £1.

Yet 35 per cent of Brits said they would invest an average of £159.60 each month in such a long term saving product if it actually existed.

If people who are not actively investing into a private pension did start to invest an average £159.60 a month, their total pension investment would increase to £199.50 a month when basic rate tax is added, the figures suggest.

And if this was invested from age 30 into a pension, it could result in a pension pot of £144,635 in today’s money by age 67, according to the report.

John Lawson, head of pensions policy at Standard Life, said: “Clearly there is still a job to be done, to help educate people on the benefits of tax efficient products like pensions and ISAs so they can make the most of them.”

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