The report examined UK employees’ understanding and use of pensions, particularly in light of the pension freedom reforms introduced on 6 April, which allow people to withdraw all of their pension in one go .

It found that workers frequently underestimated their life expectancy, often by 15 years. Only 2.3% of employees said they expected to reach the age of 100, compared to the current probability of 13.7%.

The study also revealed that just 7% of over-55s have changed their retirement plans as a result of the new freedoms.

Half of the respondents said pensions-related terminology was complicated and confusing, and 45% said they would be willing to save more into a pension if they had a better idea of how they worked. Some 52% admitted they do not know how much they should be saving for retirement.

Despite this, there was strong support for pension saving, with 47% of workers saying everyone should be obliged to join a private pension scheme regardless of how much they earn.

“The new pension freedoms provide a second chance to help people re-engage and approach retirement with greater confidence,” said Gary Smith, head of DC consulting at Capita Employee Benefits.

“The report suggests that employees welcome the increased flexibility, but they also want and expect support in achieving realistic retirement objectives. With the increased choice, it is more important than ever that employees are supported to personalise their savings journey.”

The graph below illustrates the age people think they will live to, compared to probability.

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