Millions of people have abandoned saving into pensions in the past year to bag an extra £550 or more in annual take-home pay to meet rising fuel and food bills.

The abrupt change in behaviour has left employees typically expecting to have to delay their retirement plans by three years, the Pensions Management Institute has found.

According to its research, 20 per cent of employees have opted out of workplace pension schemes or have asked to have their pension deductions reduced in the past year. Another 20 per cent are considering doing so.

Lower-paid employees on £20,000 a year can boost their take-home pay by about £550 by opting out, but they miss out on parallel contributions from their employer plus tax relief, so have less to put away for retirement. Employees on higher pay can boost their take-home pay by more.

The chase for cash to pay bills could jeopardise the automatic enrolment campaign, an undertaking with cross-party support designed to nudge people into saving for their old age.

Sara Cook, president of the Pensions Management Institute, said: “It is tragic that all the good achieved by automatic enrolment over the last decade might be undone by desperate people being forced to make short-term decisions at the expense of their longer-term security.”

Under automatic enrolment rules introduced in 2012, employers are required to automatically place new recruits into a pension scheme of minimum standards. To avoid it, employees must explicitly opt out. The plan has been deemed a huge success, encouraging more than 11 million people into retirement saving for the first time. Until recently, only 10 per cent of employees were opting out.

The PMI’s poll of 2,000 employees found that 7 per cent had opted out in the past 12 months and 13 per cent had asked to make lower contributions, which in many cases would mean they missed out on parallel contributions from their employer.

Automatically enrolled staff have a minimum of 5 per cent of their annual pay above £6,240 deducted, with employers chipping in another 3 per cent. By opting out, and allowing for extra tax and national insurance, an employee on £20,000 would get an extra £550 in take-home pay, or £46 a month.

Cook said she expected the numbers opting out or making smaller contributions to rise, “possibly rapidly”, as households grapple with the cost of Christmas and the reduction of energy price subsidies from April.

“Our research shows that a significant proportion of the general public is saving at rates that are lower than they were 12 months ago,” she said. “They are aware of the impact this will have, but feel that they have no alternative.”

Under the rules, staff who opt out are re-enrolled after three years and have to opt out again if they want to. The aim is to use inertia and “nudge economics” to encourage more pension saving.

Research this month by Aviva found that 23 per cent of workers in a pension fund were considering stopping, pausing or reducing their contributions.