A record 10 million people are now saving for a pension, according to the latest government figures published in June.

But 43% of under-45s believe a £100,000 pension pot is enough to fund their retirement. Purchasing an annuity with a pot this size would, in fact, generate an annual income of just £5,400, according to a report by Sanlam UK.

For retirees to live a comfortable lifestyle, it’s estimated they need a retirement income of £26,000 per year, which would require a pension pot of £480,000.

The research also revealed that a quarter of under-45s do not know the value of their pension or said they don’t have a pension pot, and a third have less than £10,000 in their pot.

Among those aged 55 and over, one fifth don’t currently have any savings in their pensions and a further 22% don’t know the current value of their workplace pension scheme.

Carl Drummond, senior wealth planner at Sanlam UK, said: “Our research confirms what we have long-feared; that people of all ages are simply not engaged enough with their pension and their financial security in retirement.

“Despite the best efforts by government and many employers, the message is still not getting through that people need to think carefully about how much money they will need in retirement and start saving accordingly.”