Figures released by the Office of National Statistics suggest that 20 million working-age adults (16-24) are sleep-walking towards a retirement they are not prepared for.

Alistair McQueen, head of savings & retirement at Aviva, said the figures are a wake-up call for young adults in the UK.

According to the figures, there are approximately 40 million working-age adults in the UK and half (54%) state they are confident that they will enjoy the income in retirement to which they aspire.

However, two-thirds (68%) have not thought about the number of years of retirement they may need to fund, and less than half (42%) said they understand enough about pensions to make decisions about retirement.

The employer pension is consistently seen as the safest way to save for retirement.

The appeal of employer pensions will have been boosted by automatic enrolment, which has brought eight million people into pensions since it was introduced in 2012.

Evidence suggests that most new savers are saving at minimum levels – currently 1% of employee salary, matched by 1% from the employer.

Alistair McQueen said: "Millions are sleepwalking into a disappointing retirement by failing to give proper thought towards their financial future.

"Financial confidence is a minority sport in the UK but support for all savers is critical, as is greater public awareness and understanding.

"Automatic enrolment is the savings vehicle that will carry most people towards their retirement - by staying in their auto enrolment scheme, ordinary working people are helping to build a more robust retirement.

"But even when minimum saving levels rise to 8% of salary in 2019, millions are unlikely to achieve the income in retirement that they would like.

McQueen added that the minimum levels should be raised towards 12.5% by 2028 to deliver against the expectations of many people.

First published 30.06.2017

Lindsay.sharman@wilmingtonplc.com