One in three people with a work pension say it was inadequately explained or they were never offered any information at all, a new survey reveals.

A quarter say they feel anxious or confused whenever they think about their pensions, and one in 10 have never checked what they have saved in their work scheme.

Yet pension firm Penfold found 85 per cent of the small and medium-sized firms it surveyed believed their employees fully understood the pension scheme.

Work pensions, along with state pensions, are the main pillars of people's retirement income but many don't grapple with them until later in life.

They come with many perks, most importantly the free cash thrown your way by employers and the Government, but have plenty of less well-known benefits.

Under auto enrolment, employers are required to put a minimum of 3 per cent of your earnings between £6,240 and £50,270 into your pension. Tax relief from the Government provides another 1 per cent.

You must put in at least 4 per cent on your own behalf, and if you opt out all the above is lost.

Penfold said its survey of 2,000 workers and 500 businesses showed a clear disconnect between employees' experience and employers' understanding of how well they are explaining their pension scheme.

It found 22 per cent of staff don't know how their pension works, and 10 per cent have no memory of receiving an explanation about it.

However, while 9 per cent have never reviewed their pension even once, 40 per cent reported checking it once a month.

'Auto-enrolment has been a huge success in helping millions more people start saving for retirement. But being enrolled in a pension isn’t the same as understanding how to make the most of it,' says Chris Eastwood, chief executive and co-founder of Penfold.

'Our research shows a clear gap between what employers think they’re communicating and what employees are actually taking away. Many workers still aren’t sure how their pension works, what they’re paying in, or what it could mean for their future.'

'People need regular, simple ways to understand how their pension is performing and what it means for their future. The answer isn’t simply sending people more information.'

What you need to know about work pensions

Modern work pensions are essentially cheap investment products provided and subsidised by employers.

You get free handouts for saving into a pension. The money you put into your pot is topped up by your employer and the Government.

Extra top-ups are frequently available, particularly from large employers.

For example, an employer might automatically match 3 per cent of your earnings as its minimum contribution to your pension already.

But it might be willing to make 4 per cent, 5 per cent or 6 per cent in matching contributions if you opt to save a higher proportion of your income.

If you can afford to do this, you will also receive more pension tax relief from the Government than you would have done on the extra money saved towards retirement.

Pensions tax relief allows everyone to save for retirement out of untaxed income.

That means you get a bigger sweetener the more you earn.

The rebate is based on people's income tax rates of 20 per cent, 40 per cent or 45 per cent, which tilts the system in favour of the better-off because they pay more tax.

If you keep your pension in your employer's 'default' or standard investment fund, the charge is capped at 0.75 per cent.

But it is worth looking at the other funds available in your scheme, as default funds tend to play investments safe and you can afford to take more risk if you have many decades to go until retirement.

Most default funds are trackers, which passively match the performance of one or a selection of the world's stock markets, although some are actively run to a certain extent.

Meanwhile, salary sacrifice arrangements are a nice little earner for many workers and the employers which offer them.

Employers allow staff to take a supposed 'pay cut', but the money gets ploughed into their pension or put towards some other benefit like childcare or an electric vehicle instead, and both sides pay less NI as a result.

Contributions made via these schemes without incurring NI contributions will be capped at £2,000 a month from April 2029.

Savers tend to collect a string of pension pots during their working lives, and schemes make it fairly easy to roll them up if you choose, though there can be drawbacks.

A tidying up exercise can reduce fees and paperwork and bring new investment options but you can lose valuable benefits. Check the advantages of merging pension pots and the traps to avoid.

What you save up in work and any other private pensions should be added to the state pension, to get an idea of what you will have to live on in retirement.

The state pension is currently worth £12,550 a year if you qualify for the full amount. You can check your state pension forecast here.