A survey of 1,600 respondents, conducted by Opinium on behalf of Hargreaves Lansdown, also found that over a third or 35% are not confident that will have the means to stop working. While a further 24% said that they did not know if their pension pots would be big enough to retire.

Overall, this means only 40% have an idea of when they will finish work the survey concluded. Nearly 60% of those asked said that had no idea on how much income they would need in retirement. Also, over half of the survey respondents said they don’t know how much their pensions are currently worth.

Just 44% said that they fully understood the different retirement income options  available on the market.

Five key questions to ask about retirement

Hargreaves Lansdown advise that there are five key questions that you need to ask about your retirement.

When do you want to retire? 

Sponsored

How life insurance can benefit your health and wellbeing over the decades

Sponsored by Post Office

The first is about timing. Ask yourself when you want to retire, as some people plan to work for as long as possible while others are looking for an earliest possible exit from the workplace. You can also choose to ease into retirement by moving into part-time work.

How do you want to retire?

The next point is about quality. You need to know how you want to retire, whether several overseas holidays are on the agenda or something more modest.

How much do you have?

The third question is around quantity. You need to gather all of your pension paperwork together and see how much you have in total. It is likely that more than one pension fund has been accumulated over the years and you may have lost track of what they are worth, which means you could be missing out on vital income.

If this is the case, then contact the Government’s Pension Tracing Service with either the name of your employer or pension provider, and they can give you contact details to check further.

Do not forget to look at your state pension forecast and how much you are due to receive, and fill in any gaps on record.

How much will I need?

The next question is around necessity. The Pension and Lifetime Savings Association has developed its Retirement Living Standards to help people answer the question of how much they need. The standards cover a range of minimum, moderate and comfortable standard of living to establish just how much you need  to fit into these lifestyles.

How do you want to receive your pension?

Finally, you need to ask yourself how you will take your income as there are various options For example, if you want to have a guaranteed level of income, annuities would be a good option to take. Alternatively, you can decide to remain invested in income drawdown or even take cash, for many a combination of the two can work.

The best way is to speak to your pension provider to receive more information on what is on offer.

Retirements “remain a mystery”

Helen Morrissey, the head of retirement analysis at Hargreaves Lansdowne, said: “Our retirements remain a mystery with many unable to specify how, when, or even if they think they will ever retire. Only 40% know when they will be finishing work and well over half of don’t know how much they’ve got in their pensions. Many don’t know how much income they are likely to need and less than half understand the different options available for taking income.

“Any retirement plan needs to have flexibility built into it, but this looks like most of us have no plan at all. You can argue that when you are young you don’t necessarily need to have all the detail but a closer look at the figures shows that even those close to retirement – the over 55s have yet to give their retirement much thought.”

She continued: “We’ve been through a lot in the past few years the pandemic and the cost-of-living crisis has pounded our budgets leaving us with precious little to set aside for the future. It’s understandable that people are focusing on the here and now given the current difficulties. However, it’s vital that those getting closer to their retirement age take the time to think about what they want their retirement to look like and put some kind of plan in place.”

“If you find yourself running behind where you need to be you still have a chance to make up the difference or at least think about an alternative whether that be amending your lifestyle, retiring later, or opting to work part-time. This is far better than sleepwalking towards retirement and potentially getting a nasty shock when you get there.”