Many people in the UK are unprepared for retirement – not necessarily because they are not saving, but because they do not fully understand what they have, according to our recent research.
The findings paint a picture of widespread confusion and disengagement. As many as 79% of respondents said they had little or no idea how much they have saved for retirement, while more than a quarter (27%) do not even know who their pension provider is. Perhaps most strikingly, 34% admitted they have a pension “somewhere” that they have completely lost track of.
At the same time, expectations remain high. The average respondent hopes to retire at around 62 years old with an annual income of roughly £30,000 – a target many experts consider difficult to achieve without careful planning and sustained contributions.
A worrying knowledge gap
The research highlights a significant disconnect between aspirations and financial awareness. Nearly half (45%) said they have lost track of savings, investments or bank accounts, while 49% reported losing track of pension pots from previous jobs. With people changing employers more frequently than in the past, it is increasingly common to accumulate multiple workplace pensions – and equally easy to forget about them.
Knowledge of retirement income is also limited. 73% of respondents said they did not know how much the State Pension is worth each month, suggesting that many people lack even a basic understanding of the income they may be able to rely on later in life.
It is therefore perhaps unsurprising that 87% agree pensions are too complicated, and 68% say they do not understand the different types of retirement plans available.
Despite this confusion, most people have never sought professional guidance. 76% said a pensions expert has never explained their options to them, while 58% admitted they tend to avoid thinking about retirement altogether.
More than half (52%) believe they will not have enough money to retire comfortably, underlining the level of anxiety surrounding long-term financial security.
Saving – but without a plan
The research shows that many people are saving regularly. Around 61% contribute to a pension every month, typically paying in about £258 per month, and the average saver holds at least two pension pots.
However, saving without a clear strategy can make it difficult to assess whether you are on track. Many respondents cited confusion around key issues, including different types of pensions (44%), tax treatment of pensions (30%), how to claim pension benefits (26%), lump sums versus annuities (27%), pension allowances and caps (18%), salary sacrifice arrangements (15%), defined benefit formulas (14%).
This lack of clarity can make retirement planning feel overwhelming – and may lead people to postpone decisions that could significantly improve their long-term outlook.
Small steps can make a big difference
According to Moneyfarm financial expert Carina Chambers, the risk is that people assume their pensions will take care of themselves.
“The research shows that we’re sleepwalking into a retirement crisis with too many people thinking their pensions will magically sort themselves out. Losing track of your pension pots or not knowing how much you’ve saved can have a huge impact on your future financial security.
“Planning for the future should start now, not just when you’re close to retirement. By starting early and reviewing regularly, you can take small, manageable steps to shape your financial future.”
The good news is that improving your pension situation does not necessarily require major changes. Often, a few practical steps can make a significant difference.
Five practical ways to take control of your pension
1. Find and combine your pensions if you have changed jobs, you may have workplace pensions you no longer monitor. Tracking them down and consolidating them into a single plan can make it easier to manage your savings and understand your overall position.
2. Understand your State Pension checking your State Pension forecast is a simple way to estimate the income you may receive and the age at which you can claim it. Knowing this baseline can help you plan more effectively.
3. Increase contributions when possible even modest increases in contributions can have a meaningful impact over time. When your salary rises – for example after a promotion or bonus – maintaining the same contribution percentage can help your pension grow alongside your income.
4. Know what type of pension you have understanding the difference between defined benefit and defined contribution schemes is essential. Each type has different implications for retirement income and investment risk.
5. Seek professional guidance pensions can feel complicated, but advice can help clarify your options. Whether through a financial adviser or a digital investment service, professional support can make planning more straightforward.
The importance of staying engaged
Retirement planning does not need to be complicated, but it does require attention. Losing track of pensions or postponing decisions can make it harder to achieve long-term goals.
Regular reviews, clear records and a basic understanding of how pensions work can go a long way towards building confidence – and improving the chances of a secure retirement.
*As with all investing, financial instruments involve inherent risks, including loss of capital, market fluctuations and liquidity risk. Past performance is no guarantee of future results. It is important to consider your risk tolerance and investment objectives before proceeding.
