More than three-quarters of working adults or 25 million, do not know how much the state pension is, according to LV=.
Millions of individuals don’t know when they will start receiving the state pension, how much it will be worth, or how they may prevent running out of money in retirement, according to the LV= Wealth and Wellbeing Research Programme, a quarterly study of 4,000 UK adults.
According to the study, 13 per cent or 4 million working individuals have cut their pension contributions while 23 per cent of working adults, or 7 million, do not know how much they are saving into a pension.
Meanwhile, a quarter, or 8 million working adults, claim to contribute 15 per cent or more to their pensions, compared to 14 per cent, or 4 million, who claim they do not.
In addition, the study found that 58 per cent of working adults, or 19 million people, claim they have no idea how to make sure they will have enough money in retirement, and 60 per cent of working adults, or 19 million people, claim they have no idea how to take money out of their pensions in a way that is tax-efficient.
LV= managing director of protection, savings & retirement Clive Bolton says: “The latest LV= Wealth and Wellbeing Research Programme highlights how pensions confuse people.
“Planning for retirement can be complex but it is important to get right. People approaching retirement need to take some time to think about what they want to do when they eventually stop work, the lifestyle they want and how much it will cost.
“There are several simple steps that people can take to increase their confidence of being able to pay for a comfortable retirement. People in work should join their company pension scheme and make the most of an employer’s contributions.
“Self-employed people should consult a financial adviser and consider setting up a private pension. It’s also a good idea to regularly monitor the size of your retirement funds, including the expected State Pension to know if you’re on track.
“People have a series of big decisions to make as they approach the end of their working life and each one can make a huge difference to their retirement. Taking financial advice is an excellent idea.
“A financial adviser will provide impartial advice about how much they can draw from their pension to ensure they have an income for life. They can also explain to clients how to withdraw money from a pension and avoid large tax bills.”
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