What's a better way to save than investing in a pension at the last minute, which could cost Brits up to £24,000?

According to a recent analysis, savers are postponing their pension contributions, which could have a big effect on their long-term returns

According to new data from digital pension provider Penfold, millions of UK pension savers may be losing out on tens of thousands of pounds in long-term returns by postponing contributions until the end of the tax year.

Pension savers naturally want to make the most of their annual pension contribution allowances at the beginning of a new tax year. Since unused annual allowances are not always recoverable (beyond the carryover rules), it makes sense to contribute to a pension before the end of the tax year.

Although this behavior has become a regular yearly pattern, there could be significant long-term costs associated with it.

BFIA's current problems. Consider a person who invests £10,000 at the beginning of every tax year. According to Penfold's calculations, over a 25-year period, they might have about 24,000 more than someone who waits until the end of each year to contribute the same amount, assuming 5 percent annual growth.

"We see this pattern every year," stated Chris Eastwood, CEO of Penfold. Near the tax deadline, many people increase their pension.

"It's wonderful to see people acting. However, starting earlier allows your money to grow, which can eventually have a significant impact. A "

Funding a pension prior to the end of the tax year.

A distinct pattern of last-minute saving has been identified through an analysis of Penfolds workplace pension contribution behavior.

March's one-time pension contributions were up to 4.4 times higher than the monthly average for the remainder of the year.

This indicates that a disproportionate amount of pension savings is concentrated at the end of the tax year, with approximately one in five annual contributions (or 22%) being made in March alone.

Additionally, according to the data, March's average contribution value is roughly three times greater than that of most other months.

However, people who put off making a lump sum pension payment until the very last minute may be losing out.

How pension returns could be increased by pound cost averaging.

You may lose out on the benefits of pound cost averaging and give your money less time to grow if you wait until the end of the tax year to make a sizable one-time contribution to your pension instead of making smaller, more frequent investments.

As an illustration, Standard Life states that if you invest £12,000 in one lump sum and the market declines over the course of the following year, your investment may lose 10%.

However, if you spread that investment out over the course of the year and invest £1,000 each month and the market declines in the same manner, you will buy into the market at a lower price each time, so your total investment may only decrease by 5%.

However, you will earn less than you would have if you had invested the lump sum if markets rise rather than fall during that time.

While all pension contributions are a good idea, Penfolds' data also revealed that regular monthly contributions are generally consistent throughout the year, which can help with long-term saving habits over last-minute decision-making.

According to Eastwood of Penfold, "the new tax year is a good moment to reset." "Savers can maximize compounding and create stronger financial futures by making earlier and more regular contributions.

"Making small, consistent contributions throughout the year can be an easy way to gradually increase your pension. A "