New research suggests that many adults do not understand pensions well enough to make key retirement decisions and are therefore not ready for later life.
The report says pensions have become more complex for ordinary savers in recent decades rather than easier to navigate.
For most workers, retirement now means building a fund, investing it themselves and then living off those savings without any guarantee they will last throughout old age.
People must decide how to grow enough money, how to turn it into retirement income and even estimate how long they may live.
Traditional final salary schemes, which provided a guaranteed income for life after retirement, have largely disappeared outside the public sector.
In the private sector, they have mostly been replaced by defined contribution pensions, where individuals are responsible for the money they save and invest before and after retirement.
The government-backed Money and Pensions Service surveyed 12,000 people, weighted to reflect the UK population, and found that 50 per cent are unclear about pensions.
It also found that 47 per cent do not have a retirement financial plan and 45 per cent are not saving regularly.
There were, however, signs of a slight improvement in confidence in some areas.
Financial dissatisfaction fell from 69 per cent to 63 per cent compared with the previous year, uncertainty about handling money dropped from 46 per cent to 41 per cent, and low financial wellbeing eased from 27 per cent to 24 per cent.
Money and Pensions Service is running an It All Counts campaign to encourage people to take one small step towards a better retirement, such as checking how much has been saved so far, thinking about whether contributions are high enough and using free guidance services.
People under 50 can contact MoneyHelper, which offers free pension support to the public on 0800 011 3797.
Those over 50 can book a free phone, online or face-to-face appointment with PensionWise to discuss their defined contribution pension pots.
Maps says pension dashboards, which will allow people to see all their funds and state pension in one place, are expected to launch in the coming years and should make it easier to check the total value of retirement savings.
Anna Sharkey, head of policy, said people across the UK work hard for many years and deserve a comfortable retirement.
She added that achieving that means looking into pensions and that no one needs to do it alone because experts can offer free, impartial guidance.
What to do if your pension looks too small
If you are concerned that you may not have saved enough, start by reviewing your existing pensions.
In general, you should ask your pension provider the following:
- The current fund value.
- The current transfer value, since there may be a penalty for moving it.
- Whether the pension is final salary or defined contribution. Defined contribution pensions use contributions from both employer and employee and invest them to build a pot for retirement.
- Whether there are any guarantees, such as a guaranteed annuity rate, and whether moving the fund would mean losing them.
- The projected value at retirement age. Online pension calculators can help you work out whether you are on track.
You should add those forecasts to your expected state pension, which is currently £241.30 a week, or nearly £12,550 a year for those who qualify for the full new rate.
It may also be worth considering whether you can increase pension contributions, especially if your employer will match higher payments or if you receive bonuses and pay rises.
If you are thinking about consolidating old pensions, make sure you read a guide first so you do not lose out.
If you have lost track of old pension pots, the Government’s free pension tracing service can help.
Be cautious when searching online for it, because many firms with similar names may appear in the results.
Some of these companies will offer to search for your pension, but may try to charge fees or sell other services, and some could be fraudulent.
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