The move towards defined contribution (DC) pension schemes has resulted in huge variations in retirement outcomes for future generations, according to research by Milliman for Royal London.
It shows that people's decision making has a significant impact on their standard of living under DC schemes, in comparison to defined benefit (DB) ones which offer 'highly predictable' incomes.
This comes after it was found that DC pension scheme membership has surpassed that of DB programmes for the first time, with the implementation of auto-enrolment largely responsible.
"The world of DC pensions is a world of 'decision citizens' - people whose choices during their working life can profoundly affect their quality of life in retirement," Royal London strategic insight manager, Ronnie Morgan, said.
"Regularly reviewing workplace pension contributions and increasing them 'little and often' is a far better strategy than hoping to make up for a lifetime of under-saving close to retirement."
The research shows that, under DC schemes, over two-thirds look to have significantly reduced their standard of living in retirement, while nearly half will be reliant on the state pension to fund essential spending.
In contrasting case studies, it shows how a family who review their pension contribution rate on starting work with a new employer could generate an extra £6,900 income in retirement.
While a family who opt out of automatic enrolment when employee contributions reach 5% in 2019, and do not resume saving until they are 55, could see a 69% fall in their private pension income in retirement.
In addition, the lifetime self-employed, who never fall within the scope of automatic enrolment, could end up around £3,800 per year worse off in retirement than an employee with the same pre-retirement income.
It was concluded that the role of impartial advice in supporting those, often complex, decisions will be crucial in ensuring that people have enough retirement income.
"This research shows very clearly how many people could be heading for disappointment in retirement unless they get the advice and guidance that they need to make good financial decisions throughout their working lives," Morgan added.