Fewer than half of all workers (43 per cent) feel they understand enough about pensions to make decisions about saving for retirement, new figures from the Office for National Statistics have revealed.

When asked if they had enough of an understanding of pensions to make decisions about saving for retirement, 16 per cent of respondents said that they 'strongly agree, while 27 per cent said that they 'agree'.

The analysis showed that workers aged 55-64 also had low understanding despite being headed for retirement, with just over half (54 per cent) agreeing that they understood enough about their pension to make retirement decisions, while 19 per cent disagreed.

Just Group group communications director, Stephen Lowe, highlighted that this proportion has been rising, with just 24 per cent of this subset disagreeing in 2014/16.

Lowe added: “Among 45 to 54-year-olds who will be able to take cash when they are 55, fewer than half (49 per cent) agreed they understood pensions while more than a third (34 per cent) or about 3 million people in this age group disagreed."

However, understanding amongst younger savers was particularly low, with 55 per cent of 16-24 year olds disagreeing that they had enough understanding to make decisions around their retirement, compared to just 19 per cent who agreed.

There was also a disparity between genders, with just 35 per cent of women agreeing that they had sufficient knowledge to make retirement decisions, compared to 51 per cent of men.

Furthermore, just 81 per cent of all workers were aware of being auto enrolled into a pension scheme at all.

Commenting on the findings, Lowe added: “As we approach the five-year anniversary of the pension ‘freedom and choice’ reforms it is important to note that millions of people getting close to retirement aren’t confident about their pensions knowledge.

“Pension freedom and choice can only work if people make intelligent and informed decisions. Support is available in the form of guidance from the free, independent and impartial Pension Wise service or from regulated financial advisers."

He added: “Auto-enrolment is broadening pension coverage which is a good thing if that money is used to support retirement.

“Given that many people aren’t confident about their pension knowledge – and some will perhaps be overconfident – more needs to be done to encourage higher take-up of guidance and advice.”

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