Starting pension contributions at the age of 27 could result in losing £54,000 in retirement, compared to those who start investing at the age of 22, Standard Life has found.

Research by the savings firm found that those who begin working on a salary of £25,000 from the age of 22 could have a total retirement fund of £434,000 by the age of 66, not adjusted for inflation, when paying the minimum monthly auto-enrolment contributions of 5% employee, 3% employer.

However, by waiting five years to start make these contributions, pension savers could result in a total pot that is £54,000 less at £380,000.

Furthermore, the research revealed that waiting until the ages of 37 and 42 years old can lead to losses of £158,000 and £208,000 respectively.

Managing director for retail direct at Standard Life, Dean Butler, said: "It’s remarkable to see how just a five-year delay in saving in your twenties can significantly reduce the pension you retire on by tens of thousands of pounds. At the start of a career and when first earning money it can be tempting to spend as much as possible.

"However, as our analysis shows, if your finances permit and it’s appropriate for your circumstances, the sooner you engage with and begin to contribute to your pension, the better your ultimate retirement outcome could be."

Standard Life added that the key difference between investing at these different ages is the power of compound investment growth.

However, it said although the balance must be struck between putting money away for future and meeting near-term costs and goals, these figures highlight the challenge that delaying savings for a number of years can create in the long-run.

Butler added: "Our calculations show that contributing to your pension from the very start of your career can mean the potential investment growth is much more significant and can result in a much larger retirement pot. For those in a position to do so, consistently paying into a pension from as early an age as possible and topping up payments, especially in your twenties, thirties or early forties, can make a massive difference over time.

"The longer you wait to start the worse off you could be by the time you stop working, so if you’re able to save into a pension your future self is likely to thank you for it."

---