To demonstrate the impact, AJ Bell used the example of a 30-year-old who has just started a new job and has yet to make a pension contribution, assuming they earn £30,000 a year and their salary increases by two percent each year.
If they saved in their workplace pension scheme, then eight percent of their salary would go towards their retirement.
If, despite the cost of living crisis, they decided to stay in the scheme and enjoyed four percent annual investment growth, AJ Bell says they could have a fund worth £306,000 by age 68, which would be their scheduled state pension age.
This assumes their pension contributions are based on total earnings.
If they opt out of their workplace pension scheme for three years, then their fund at 68 could be worth significantly less at around £269,000.