Retirement savers do not know enough about how their pensions work, which is hampering their efforts to set realistic financial goals, says a new survey.
Not enough people monitor their savings progress, while most have an unrealistic expectation of when they can retire.
Although 38% of workers wrongly feel their standard of living will stay the same when they retire, 8% believe their living standards will improve, according to the report from the Chartered Institute for Securities and Investment.
The survey examines attitudes, knowledge and financial behaviour people have over pensions.
A shocking lack of understanding about pensions was revealed.
Lack of knowledge
More than half of workers (56%) paying into a pension did not know how their contribution was.
Three-quarters (76%) did not know how much their pension fund is worth, while 34% never checked their pension account and 31% only checked in every six months or so.
One in four savers aged 55 or over never check their pension, compared to 81% of people who check their bank accounts at least once a week.
Most workers want to retire in their 60s (56%), while 40% believe they will retire in their 60s, even though the government intends to raise the state pension age to 70 or more for younger workers.
A few (4%) claim they do not want to retire.
But only one in eight believe they can retire when they wish because they have saved and planned for their retirement.
A phased retirement is favoured by one in four workers, but one in nine (11%) want to work for as long as they can.
Money will decide when most people retire – either because they have enough to stop working or need to save more to bolster their savings.
Almost half of workers hoping to retire (45%) believe their standard of living will decrease in retirement, with 38% feeling their standard of living will stay the same.
“The lack of knowledge relating to pensions has emerged as a worrying theme in our survey. A pension is likely to be the biggest single asset owned by an individual – more than a shared house – yet receives little attention,” said CISI CEO Simon Culhane.