Three-quarters of UK adults are ignorant of their pension savings

More worrying was the study found that as many as 79 per cent – four in every five – of those aged between 55 and 64 could not put a figure on their pension savings. 

This group is at the most crucial stage of planning for retirement as they start to look at their options for life after work, yet they do not have a clue about how much they have saved. 

Things are not looking so good either for the cohort aged between 45 and 54, who were equally clueless about their pension savings (see table).

Most people simply haven’t a clue how much they’ve saved

Source: Standard Life, Retirement Voice study 

Standard Life’s research also highlighted that women are less likely to have a handle on the amounts they have saved – 81 per cent cannot put a number to it, compared with 68 per cent of men. 

There is greater awareness of of how much income will be needed in retirement, with respondents across all age groups and of each sex identifying a number greater than the Pensions and Lifetime Savings Association’s minimum standard of living threshold. However, women estimated considerably less than men – £22,428 against £32,617. 

Even if they do not know how much has been saved to date, income makes a huge difference to ambition. Individuals earning less than £30,000 targeted £139,428, compared with £309,755 for those earning between £40,000 and £49,999. 

Those earning more than £50,000 said they wanted to save £821,880 – roughly £682,000 more than those on the lowest incomes.

Engagement needs to start now 

Standard Life managing director for customer Dean Butler said that given the responsibility people now have for their own pension savings, it is worrying that the majority cannot estimate their pot size – particularly those approaching or even in retirement now.

“Despite its huge success, auto-enrolment, along with the fact UK workers tend to change jobs more regularly now, has meant many workers further into their careers have multiple small pots – younger workers, in most cases, won’t have this issue,” he said. 

“They might also be more used to a world in which long-term saving is entirely down to them, unlike older workers [as] it’s all they’ve ever known.”

Despite its huge success, auto-enrolment, along with the fact UK workers tend to change jobs more regularly now, has meant many workers further into their careers have multiple small potsDean Butler, Standard Life

The disparity between men and women echoes what is known about the gender pensions gap, Butler said. Women are more likely to leave the workforce to raise a family or care for family members, so will earn less throughout their lifetime. It is likely that this has caused them to engage less with their pension pots.

“In order to plan your financial future, it’s vital to engage with your finances as early as possible,” Butler continued. 

“The best place to start is by checking what you currently have in your pension, and what this could equate to in retirement, and there are tools and calculators that can help with this. From there, you can see whether your current funds will provide the type of retirement lifestyle you want and, if not, you can make changes to improve your situation, such as increasing regular contributions or paying in a lump sum. 

“You may need to make lifestyle changes to accommodate this, such as cutting back on everyday spending, so it’s important to take a holistic view of your finances to see what’s possible in both the short and long term.”

A worrying trend 

Standard Life’s Retirement voice 2022 study is the latest in a series of surveys that demonstrate a worrying lack of understanding among those about to enter into retirement. 

The Wisdom Council’s “The great retirement study” discovered a worrying lack of preparation, very little planning and a high degree of wishful thinking among the 2,000 55 to 75-year-olds it covered. 

Fewer than one in five were very or extremely confident they will have enough money for a comfortable lifestyle in retirement. 

Almost one-third (30 per cent) were either not at all confident or not very confident, while one in three expect the state pension to make up most of their income. 

There was a huge mismatch between anticipated spending and earning, with very few having taken professional advice. 

Though half were prepared to pay for a pre-retirement review of their finances, they were not prepared to pay for it. The average they were prepared to pay was just £213, far below the £3,000 average cost of an adviser offering at-retirement advice on a £250,000 pension pot, according to Unbiased.co.uk. 

Yet, the latest census data from the Office for National Statistics indicates that while those of retirement age are leaving work healthier, increasing life expectancy, relationship status and care needs mean they face more complex planning needs. 

That complexity is unlikely to be covered by the state pension, but the individuals will be in good company. The number of people aged 65 years and over has increased to more than 11mn in 2021, from 9.2mn in 2011, while the the proportion of that cohort increased to 18.6 per cent of the population from 16.4 per cent. 

padraig.floyd@ft.com