Savers do not understand pensions tax relief as 90% fail to put any of their bonus into a company scheme, according to research commissioned by Aviva.
The survey of 2012 adults during February 2017 by Censuswide revealed widespread misunderstanding of what the government top-up could offer them.
It found only 24% grasped the tax advantage of having their bonus paid directly into a workplace pension while 39% chose to spend it on a treat, like shopping or a holiday.
However, education could make a difference as 33% said they would opt to have some or all of their bonus paid into the company scheme when the tax benefits are explained to them.
Despite this, only 27% said they would still take their bonus as cash after tax relief was understood.
Aviva workplace benefit managing director Colin Williams said: "We live in a world of instant gratification. We want something now, not later, and to some extent that is understandable. But it's clear that a large number of people are missing out because they don't understand how pensions work.
"If people don't recognise the value of these then they are not able to make an informed choice when they are offered a bonus. This knowledge gap is creating a savings gap."
Tax relief and employer pension contribution are the two biggest reasons to pay into a workplace pension, he added.
Therefore people are "much more likely to save for their retirement if they have a clearer understanding of the benefits of contributing to their pension," he continued.
Tax relief has been a source of much debate and speculation in the pensions industry for many years.
Last week's Pensions Buzz survey found 60% of respondents believe it is more likely the government will reduce the amount it gives away in pension tax relief after its U-turn on raising national insurance contributions (NICs) for the self-employed.
The government said in a letter to AJ Bell that "now is not the right time" to undertake significant reform of pensions tax policy, such as moving to a flat rate of tax relief.
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