People who started their careers before 2012 were not automatically enrolled in their workplace pension scheme, hence they were more likely to start saving for their retirement later in their careers. A recent report has highlighted how detrimental this decision could be, cautioning people about delaying their automatic enrolment now.

If you start work and saving for retirement at 22, your pension pot by the time you reach 68 will be approximately £210,000. However, if you delay this by just five years and only start saving at 27, you’ll be £40,000 worse off with just £170,000 at 68.

This is according to a new report by Standard Life, as seen by Money Week. And the calculations just get worse the more you put off saving for retirement.

If young workers only start saving into a workplace pension at 32, they’ll be looking at around £136,000 by the time they’re likely to qualify for state pension.

Delaying saving by 15 years will make them £103,000 worse off than someone who started saving at 22, proving that each moment counts when it comes to pension funds.

These figures are based on an person starting employment with a £25,000 starting salary at 22 and receiving a yearly pay increase of 3.5%. The experts also factor in a 5% personal pension contribution and a 3% employer contribution to a scheme yielding a 5% investment return.

According to the Retirement Living Standards report from PLSA, the least amount a sole individual requires for retirement is £13,400 annually, covering only essential costs.

To afford a more comfortable retirement, including UK holidays and occasional takeaways, a lone individual needs around £31,700 every year.

For a retirement that includes foreign travel, streaming services and new clothing, it’ll be approximately £43,900 annually for one person.

Effectively, young employees who do not contribute to their workplace pension for five years could lose out on three years of basic retirement income or almost an entire year of a comfortable retirement.

Dean Butler, managing director for retail direct at Standard Life said: “If your finances permit and your circumstances allow, the sooner you engage with and begin to contribute to your pension, the better your ultimate retirement outcome could be.

“While delaying entry into the workforce, for instance to pursue further education, can offer long-term benefits, both financially and personally, it’s important to be mindful that this might require you to contribute more later on to meet your retirement goals.

“Similarly, if you choose self-employment in your twenties, it’s worth opening a personal pension, as you won’t benefit from automatic enrolment via a workplace and could miss out on important early-career contributions.”

Automatic enrolment came into effect in October 2012 and its implementation in workplaces took place over several years.

The policy makes it compulsory for employers to enrol eligible employees in a workplace pension and make contributions.

To qualify, employees must be aged between 22 and state pension age, with a pre-tax income of at least £10,000, or a monthly income of £833, or a weekly income of £192.