Millions of middle-aged employees have no idea how much they need to be saving to ensure a comfortable retirement, according to the latest survey by Aviva.
The insurer found 64 per cent of employees aged 45 or over, are in this situation, equating to almost nine million people in the workforce.
Meanwhile five million employees in this age bracket did not now how much they had already saved into a pension.
There was similar confusion over the state pension: 43 per cent of respondents where unaware how retirement income they will get from the government, while more than a quarter (26 per cent) did now know at what age they’ll be eligible for this benefit.
Most employees (62 percent) aged 45-plus did not know what the pension freedoms mean for them, while 37 per cent do not know what type of pension scheme they have – for example whether it’s a defined contribution or defined benefit scheme.
Collectively Aviva says this study show that vast swathes of the working population are effectively ‘sleep walking into retirement’ and there is an urgent need for information and guidance from both employers and the industry.
Aviva’s managing director of savings and retirement Lindsey Rix says: “Without a clear picture of what they currently have saved or might need to save for a comfortable retirement, our findings show millions of UK employees are approaching retirement with their eyes closed – with no realistic idea of how near or far they are from their destination.”
She called on employers do to more to help these employees.
“As a first step, mid-life employees who are mystified by their pension savings should try to get a clear picture of what they have saved so far and how much of an income this can provide them with over the course of retirement. For some, this may be a pleasant surprise, while for others, it could be the wake-up call that’s needed to spur them to take action. People whose pensions are in need of a boost shouldn’t be disheartened, however, as it’s never too late to save.
Aviva has recently launches a Mid-Life MOT for its employees aged 45 and over to offer them guidance on their wealth, work and wellbeing needs.