Despite the best of intentions, staff drop their plans to pay more into their pensions soon after a pay increase, using the money for other purposes, according to research analysis by neuroscientists for Zurich UK.

The Set the Right Goals study from Zurich UK combines research from YouGov of over 2,00 adults with an experiment from neuroscience specialists Mindlab.

The research suggests that there is a very short window of opportunity to boost pension contributions after a pay rise but it does not last long and if the moment is lost workers will fail to pay more. The research is bad news for pension campaigners who want workers to pay more into pensions and for the government which has introduced a number of initiatives, such as auto-enrolment, to boost pension funding.

The research tested a further 900 participants to measure the effect of emotions on savings and took a closer look at the difference between what people say they will do and their actual behaviour.

The YouGov findings found that 42% of UK adults say earning more would encourage them to save more into a pension although what actually happens is somewhat different.

Duncan Smith, managing director of Mindlab, said: "People think that they will save more of their income if they get a pay rise. Many think that this is the case when they actually increase their savings amount but this research shows that the proportion of income saved, on average doesn't change.
When our finances change for the better we need to focus on our future goals and how we can achieve them."

Anne Torry, head of Zurich UK Life, said: “Many people think that they will save more in the future when they get a pay increase but in reality they quickly adjust spending to reflect their new salary and so no longer see the increase as extra money that they can save.”