Some young workers in the United Kingdom are increasingly opting out of workplace pension schemes as rising living costs force them to prioritise immediate financial needs over retirement savings.

Among those affected is 26-year-old Hassan Nassar, a trainee doctor in England, who stopped contributing about £430 monthly to his NHS workplace pension in September.

Nassar said he needed the additional money to support a sick family member, save towards his first home and meet rent and student loan repayments.

He estimated that opting out could cost him between £5,000 and £10,000 in future retirement income because of the compound growth he would miss over the years.

Another young worker, 22-year-old Evie from Cornwall, said she also opted out because she needed to meet rent, food and transport costs while saving for a house and car.

The UK Department for Work and Pensions said about 22.6 million people, representing 90 per cent of those eligible for automatic enrolment, were contributing to workplace pensions, while about 2.5 million were not.

Pensions Minister Torsten Bell warned that a growing number of young workers were not saving enough for retirement, raising concerns that future retirees could receive lower private pension incomes than those retiring today.

Financial adviser April Leeson also warned about the long-term consequences of stopping pension contributions, particularly the loss of employer contributions and the opportunity for savings to benefit from compound growth.

She noted that money saved during a worker’s 20s could have several decades to grow before retirement.

Official UK statistics show that workplace pension participation has stabilised in recent years, although stopping saving and contribution opt-outs increased in the latest year.