Over a quarter (27 per cent) of 45–54-year-olds say they have no understanding “at all” of pension terminology, research from Get Britain Pension Ready, a campaign by Annuity Ready, has revealed.

The survey showed that young adults aged 18-24 claimed the highest levels of understanding of pensions terminology, despite being the most likely to have only just entered the workforce, as 27 per cent claimed to have a "great deal" of understanding of pension terminology.

However, the high levels of understanding indicated by those aged 18-24 appeared to be misplaced when tested against actual knowledge of pension products.

In particular, the campaign found that a "striking" 39 per cent believe they are currently enrolled in or receiving payments from a final salary pension scheme, despite this product having been largely phased out before this generation entered the workforce.

In contrast, older savers aged 65 and over showed the most familiarity with pension products as 35 per cent said they know exactly what annuities are, the highest rate among all generations and well above the national average of 25 per cent.

Behind them, those aged 55 to 64 years old (27 per cent) also indicated notable degrees of knowledge about annuities, which the campaign group suggested may be due to this cohort's proximity to retirement.

However, "surprisingly", those aged 18 to 24 (27 per cent) are just as likely to say they have heard of and know exactly what an annuity is, despite being the generation furthest away from retirement.

The lowest understanding of annuities was amongst those aged 45 to 54 (15 per cent) and those aged 35 to 44 (16 per cent).

Despite these key knowledge and understanding gaps, the research found that many savers are turning to social media for advice about pensions and retirement planning.

This was particularly prominent amongst 18-24 year-olds, 30 per cent of whom said they would turn to social media, nearly four times the national average of 8 per cent.

Get Britain Pension Ready warned that this reliance on social media for complex pension education may help explain both their self-reported confidence in understanding and the misconceptions they appear to have around certain pension products.

In contrast, respondents aged 65 and over demonstrated a self-reliant approach to pension planning, as 27 per cent per cent said they do not ask anyone for advice, significantly above the average of 13 per cent.

Commenting on the findings, Annuity Ready commercial director, Sarah Lloyd, said: “Our previous Get Britain Pension Ready research at the start of the year uncovered significant misunderstanding and confusion across generations, particularly among Gen Z and Gen X, so with this research we wanted to delve deeper into these knowledge gaps.

"Education is such a fundamental part of pension preparedness, and the earlier we can help people get the information they need to start planning for retirement, the better."

However, Annuity Ready independent generational expert, Dr Eliza Filby, argued that while Gen Z's over-confidence in their understanding may be "concerning", Gen X's knowledge gaps represent a more immediate crisis, as this generation approaches retirement with limited time to plan for their future beyond work.”

“What we're seeing here reflects broader societal shifts that have particularly impacted Generation X, the so-called 'squeezed generation' who find themselves caught between caring for aging parents and supporting their own children well into adulthood, often while facing their own financial pressures," she continued.

“Unlike previous generations who could rely on more straightforward pension pathways, Gen X has had to navigate an increasingly fragmented landscape without the digital nativity of Gen Z or the established pension certainty of baby boomers and in the context of rising divorce which also tends to impact retirement pots.

"We know that this generation expects to work longer but that doesn't negate the need for retirement planning."

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