Workplace pensions engagement is fundamental to helping employees plan for later life, according to the CBI and Aegon, which conducted the research.

Offering high-quality workplace pensions is “critical to successful businesses and retirements”, but more workers and firms “need to open their eyes” to the benefits of pensions and be alert to the risks of failing to engage, they said.

The survey, of 189 participants from a mix of small to large businesses and across all industry sectors, plus 15 in-depth interviews, took place in October and November last year.

As a result of the findings the CBI and Aegon argued that a “quiet pensions revolution” was taking place with auto-enrolment at the forefront of private pensions investment.

They found 92% of firms surveyed were contributing above the statutory minimum level requirement for auto-enrolment schemes, which is currently 1% for employers, rising to 3% by 2019.

It was estimated that £133bn will be paid into workplace pensions in the 2019/2020 tax-year, but the surveyors called for “much more” to be done by firms “that will ultimately help them to realise their business value and also recruit and retain staff.”

Key findings included:

• Just 5% or fewer of eligible workers have opted out of auto-enrolment and 69% say a firm’s pension scheme is an important factor when looking for a new job.

• But although nearly half of businesses (47%) believe that recent pension freedoms have led to employees being more engaged, there remain major gaps by age, income and employment status/length of service: those aged 50+ are almost twice as likely as (87%) those under 34 (48%) to be engaged with their pension

• Workers on a higher wage are significantly more engaged (87% of those earning £45-75k are engaged) than those on lower wages (only 33% of those earning less than £13k are engaged) and 7 in 10 employees of more than 10 years are engaged with their pension, while younger people with other financial priorities are engaged far less.

Neil Carberry, CBI managing director, said: “Businesses are contributing billions to their workers’ pensions each and every year, playing their part in a quiet pensions revolution with auto-enrolment having a growing influence over workplace saving.

“While many businesses rightly recognise the positive effect that their investment in pensions can have on recruiting and retaining staff, others need to open their eyes to grasp the opportunities in front of them.

“Engaging better with your workforce on pensions is not a ‘nice-to-have’ but is absolutely fundamental to the success of workplace pensions schemes and well-funded retirements for workers.”

Paul Bucksey, managing director, Aegon Workplace Investing, said: “Pensions are a big financial commitment for employers but this investment often goes underappreciated.

“A workplace pension is part of an employee pay package, the challenge is for businesses to help their employees recognise this.

“Engagement is the key to changing behaviours and helping employees achieve long term financial security.

“When an employer gets behind their scheme and encourages the workforce to take action, engagement levels rise.

“Some employers are already going the extra mile to support their workforce in getting their pensions on the right track.

“But what remains clear is that whether you choose to hold roadshows, workshops or webinars, offer online financial planning tools or workplace financial advice, you need to do it regularly, as part of a wider financial awareness strategy.”

He added: “From recruitment to retirement, long-term planning and regular action will help your employees reach a point where they can afford to retire.

“Ultimately, a workforce that can’t afford to retire presents employers with some new challenges around succession planning and managing an ageing workforce.

“Better pension engagement from your employees will help you plan ahead to continue to grow and adapt your business.”