A squeeze on income during mid-life means that almost half of people who stop paying into a pension pot do so because of cash flow troubles.
Fears over balancing incomings and outgoings are the most common reason why households in the UK stop saving and investing, with 42% citing it as the key problem, according to a report by public policy think tank the Social Market Foundation (SMF).
Cash flow is also important for pension savings decisions, with 35% of people saying it is behind them stopping paying into a pension product.
When broken down by age, cash flow issues were found to be a major barrier to saving among those aged 35-44, with 48% of those who stopped saving into a pension blaming money worries.
The tackle this mid-life squeeze on savings, the SMF is calling on the Government to build on current pension reforms and create an earlier window for exercising freedom and choice in pensions savings, at 35, when its study found people were most likely to stop saving due to cash flow pressures.
This window would provide an earlier opportunity to educate and engage consumers about their pension goals and savings options, the SMF said, sparking a new wave of competition and product innovation in the financial services industry.
The report also found that consumers prefer short-term savings products, which they feel allow them easy access to their cash.
People were also deterred from using long-term investment products as they felt locking cash away is as risky as putting capital at risk in investments.
To encourage higher rates of long-term savings and investment, the SMF proposed removing stamp duty on all share transactions by retail investors.
It also proposed creating an additional £2,000 tax-free threshold for people to invest in bonds through an Individual Savings Account (Isa), and a focus in financial product advertising on long-term information, rather that year-by-year returns.
Katie Evans, an economist at the SMF who co-authored the report, said: " Giving access to pension savings at 35 would provide an opportunity for individuals to engage with their pension providers.
"This could be used to educate and to build financial confidence, helping consumers articulate their goals for retirement and understand the steps they need to take to achieve them.
"The benefits of this intervention, helping to set people on the path to healthy savings 30 years before retirement, should easily outweigh the cost of any early withdrawals."
:: The SMF polled 2014 UK adults for its report, Savings In The Balance: Managing Risk In A Post-Crisis World.