Pension Problems: British Workers Don't Think They will Save Enough to Retire

British workers are extremely pessimistic about their future as less than one in 10 of employees in the UK say they are saving enough to provide for them in retirement.

According to research from the National Employment Savings Trust (NEST), a vast majority (94%) of workers think having more to live on than the state pension – which will be worth around £7,000 ($11,598, €8,496) per year – is either an absolute minimum or a "nice to have" to live comfortably in retirement.

But the report found that confidence in achieving even these modest goals is low and falling as just 9% of respondents think their current and future savings will be enough to provide for them in retirement, down from 14% in 2011.

The survey also worryingly found only half of respondents feel able to give a specific prediction about how much they will actually need and of those, fewer than half believe they will get it.

"The good news is that workplace pension reforms have come at the right time to help people get on the savings ladder and put something in place for their retirement," said Graham Vidler, NEST's director of communications.

"But it's clear that many are worried about what they'll live on and don't feel they're doing enough. We all have a vital role to play in helping people bridge that gap between their ambitions and their confidence for the future."

However, against the backdrop of falling confidence in retirement prospects, the report also suggests pension saving is rising up people's priority lists.

In 2013 retirement saving jumped to third on the list, with only holidays and saving for a rainy day coming ahead of it as a priority.

This compares to the results in 2011 when saving for retirement ranked seventh and, when asked where they would spend spare money, short term goals like socialising and going out had been higher up the priority list.

The number of people choosing to stay in their workplace pension scheme after being automatically enrolled has also been far higher than expected with opt-out rates on average less than 10%.

NEST said only among older workers are opt-out rates anywhere near the previously predicted levels at around 20%.

The majority (68%) of people welcome the idea of being put into their company pension scheme automatically and recognise the benefits they will receive.

But the report revealed understanding of pensions and how they work is still low and may provide insight into people's difficulty in setting expectations for the future.

NEST said just a fifth of people questioned claimed they knew anything about pensions "in any detail"; and when probed, even this basic knowledge was often flawed.

In addition, a shocking 12% of workers said they knew nothing about pensions at all.