The research also found that the pension pots of those nearing retirement were currently more than £100,000 short of where they should be to satisfy the income pension savers want in retirement.

In April 2023, the annual allowance – the amount savers can put into a pension pot each year before paying tax – increased from £40,000 to £60,000.

Some 42% of HNWIs said then they planned to contribute the full £60,000 but only a third have contributed more than £40,000 and just 8% more than £50,000.

Factors such as the cost of living crisis and supporting family members, have meant pension contributions are not being prioritised.

Some 13% of respondents said they were reducing pension contributions as a direct result of rising costs. 

Meanwhile 10% of those with adult children (and 15% of those with adult grandchildren) said they have reduced their own pension contributions specifically to fund financial support for younger generations.

Nearly a third of HNWIs (27%) said they were contributing above the previous annual allowance – adding between £40,000 and £50,000 into their pension this year – yet only 8% were contributing up to the maximum £60,000.

The average pension contribution for HNWIs is £35,400, up only £1,600 from April 2023 where average contributions (prior to increase in annual allowance) were £33,800.

The research showed the average pension pot of HNWIs is £483,571 – more than £50,000 short of the £535,979 pot that would be necessary to provide their desired level of income. For those nearing retirement (respondents aged 55+) the shortfall is even larger, at more than £115,000.

Gianpaolo Mantini, Chartered Financial Planner at Saltus, said: “When the increase to the pensions’ annual allowance contribution came into effect this time last year, it is something we would have expected to see most HNWIs making the most of. However, they are not.

“As a relatively new change, I suspect the under-utilisation could be due to a lack of awareness about the increased allowance, and if people don’t know that it’s available, they may be sticking to the same approach for their pension that they have used for years.”

• The survey included 2,000 UK respondents (aged 18+) who have £250k+ of investable assets. Research was conducted by Censuswide. The research was carried out online in December 2023.