Nearly half of millennials think they have a final salary pension scheme, according to research by The Wisdom Council.
The figures showed that 40 per cent of millennials thought they had a defined benefit scheme when the correct number was closer to one in five.
Despite the rising cost of living and lack of saving, more than 60 per cent of people still expected to retire by their 60s. Meanwhile 38 per cent do see full retirement happening beyond 70.
The data also showed there was an over-reliance on the family home as a store of wealth.
Despite the fact many younger generations were struggling to get on to the housing ladder and older generations needed to fund the cost of care, almost two fifths (39 per cent) cited equity in their house as the principle source of funding to support their retirement.
Dawn Hyams, head of investor insight at The Wisdom Council, said she was surprised by the findings.
She said: "We talk to investors on a daily basis through our work, and even we were surprised by the huge gap in pension understanding. It isn’t that customers don’t want to know – they were hugely engaged in the focus group sessions we ran – but they are still at a loss when it comes to most communications around their retirement savings.
"Providers are making huge efforts on language, but the industry is still too quick to jump into the detail."
The report, supported by BlackRock, HSBC, Standard Aberdeen, St. James’s Place, Investec, Columbia Threadneedle and PIMFA, surveyed more than 2,000 people.
The figures also showed many savers were unaware of tax relief on pensions– only one in five recognised this as a feature of workplace schemes.
Quotes from those surveyed included: "I told my kids not to bother with a pension" and "Unless you work in the city, have a fantastic job…, your private pension is worth nothing, it’s not worth doing."
Nathan Long, pensions expert at Hargreaves Lansdown, said the results were worrying but unsurprising, particularly when it came to the millennial lack of undedrstanding on pensions.
"It is not surprising , they are the least engaged group," he said of millennials. "That is why the nudge of auto enrolment is so valuable." He added that the language was still "pretty murky".
He said there was also a problem with the understanding of property, and that too many see it as a store of wealth.