Workers putting too little into pensions

The average contribution into a good defined-benefit scheme would be 20-25 percent of an employees' salary, Pugh said.

Members of defined-contribution schemes must bear the full risk of not getting as much income as expected from their pension when they retire, while those in defined-benefit schemes receive income guarantees from their employers, Pugh added.

Companies should be more imaginative in trying to encourage workers to put money into defined-contribution schemes to save more for their retirement, Mercer said.

Methods such as automatic scheme entry requiring members to contribute or encouraging workers to divert part of their future pay rises into their pensions can significantly boost their retirement incomes, it said.