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Government private pension reforms will boost retirement savings but only by a small amount, a think tank has said.
The Institute for Fiscal Studies (IFS) found that a shift to automatic enrollment and an increase in required minimum contributions should boost coverage of pensions.
But the increase to retirement savings will be relatively small in absolute terms, the institute warned.
Automatic enrollment onto pension company schemes or new low-cost personal accounts will be introduced from 2012, with the right for individuals to opt-out.
The IFS report found that in 2005, 4.7 million employees were denied the opportunity to be included in an employed pension scheme.
It was estimated that contributions from those 4.7 employees who were not members of a company pension scheme could have amounted to £4.2bn.
Individuals would have accumulated moderately small amounts reaching less than £2,170 over the course of five years, the report suggested.
Matthew Wakefield, senior research economist at the IFS, said that in 2005 half of employees not contributing to a private scheme earned less than £14,000, while more than half had no net savings.
"Getting such individuals into pension saving might be seen as a success of the policy, but any increase in pension saving is, at least in absolute terms, likely to be small," he explained.
"While many of these individuals have little scope to finance new pension saving by reshuffling existing assets, some could pay down existing debts less quickly, which would still mean that new pension saving was not new saving overall."
A Department for Work and Pensions spokesman responded: "With these reforms we will be giving between nine million and 11 million people the opportunity to save in a workplace pension scheme with an employer contribution, many for the first time, which was a key Pensions Commission recommendation to help more people save for retirement."
Dods Parliamentary Communications Ltd