According to new research from Royal London, “fundamental aspects of pensions” remain a mystery to many.

A survey of 2,000 UK adults carried out by Opinium for the mutual insurer found that only 15% fully understood how tax relief on pension contributions works.

A further 31% said they had some understanding. The remaining 27% said they had heard of pensions tax relief but did not know how it worked.

One-third (33%) of women had no knowledge of tax relief in comparison to a fifth (20%) of men.

A further third of women (33%) had some understanding of how pension tax relief worked compared to almost three in five (59%) men.

Royal London says the data suggest that people with a better understanding of how pensions tax relief works viewed pensions more positively and may contribute more in future.

Some 25% of people said they would be more likely to increase pensions contributions if they understood pensions and pension tax relief better.

Other areas of pensions tax relief causing confusion included the ability to pay contributions for another person as well as the use of salary and bonus sacrifice.

Of those questioned, 60% said they were unaware they could contribute to the pension of a spouse or child enabling them to benefit from the tax relief as well as the boost to their pension contribution.

Jamie Jenkins, director of policy & external affairs at Royal London, said: “This research shows how pension tax relief remains poorly understood with only 15% of people saying they have a full understanding of how it works.

“However, there is a huge positive in that the data shows that once people do understand it better then tax relief has the potential to change how people view their pension, with a significant proportion saying they would be more likely to increase contributions as a result.”