New research1 highlights just how many people remain in the dark. While 53% of adults say they know their pensions well, only 35% can correctly identify a defined benefit (DB) scheme and 34% understand what a defined contribution (DC) scheme is. One in five don’t even know which type they have. More than half (57%) are unaware that the government supports pension saving through tax relief.
It’s a similar story when it comes to how pensions are invested. Over half (55%) admit they don’t know how their funds are invested, and 81% have never adjusted their investment strategy. A quarter say it’s because they don’t know enough or didn’t realise they could.
Meanwhile, many people have several pension pots from previous employers. Almost 70% have between one and five, yet 20% don’t know how many they own. Among those who do, 35% aren’t sure how to access them. Only 15% have consolidated their pots, although nearly half would like to but don’t know where to start.
Mind the State Pension gap
Even the State Pension remains a mystery for many. Half of UK adults don’t know how much they’ll receive, and nearly a third are unsure of their qualifying age2. Over half (51%) don’t know the full amount (currently £11,973 a year) and 52% don’t know how to check their entitlement.
With so many unknowns, it’s no surprise that people lack confidence about their retirement outlook. Yet, with your earnings likely to be at their peak and the finish line still far enough away to make a difference, now is the ideal time to regain control.
Feel empowered
The first step to taking control of your pension goals is to understand how much you’ll need in retirement. According to the Pension and Lifetime Savings Association (PLSA), a single person requires around £13,400 per year for a minimum lifestyle and £31,700 for a moderate lifestyle. For couples, that rises to £21,600 and £43,900 respectively. These figures apply to those living outside London and exclude housing costs.
Knowing these benchmarks helps you measure where you are versus where you want to be; to start making confident, informed choices about how much to save and how to invest.
What you can do now
1. Get clear on the basics
Identify your pension type(s), review contributions (including employer payments) and understand where your money is invested.
2. Consolidate thoughtfully
If you’ve built up multiple pensions, combining them may simplify management and reduce costs. However, your financial planner can help here to ensure no valuable benefits are lost.
3. Review your investment strategy
As your pension grows, make sure your investment approach still matches your risk tolerance, time horizon and goals. Your financial planner can help fine-tune this balance.
4. Check your State Pension forecast
Visit Check your State Pension forecast – GOV.UK to confirm your entitlement and understand how it complements your private pension and other assets.
5. Guard against behavioural traps
Confidence and optimism are strengths, but they can lead to impulsive decisions – whether chasing short-term returns or reacting to headlines.
6. Seek advice early
Working with a financial planner helps connect every part of your financial life – tax, investments, pensions and long-term goals, giving you clarity and confidence about your next steps.
Sooner rather than later
Between work, family and life’s daily pressures, it’s easy to put pension planning off. The earlier you take action, the more flexibility and freedom you’ll gain later.
Every review, every contribution, every conversation with your financial planner compounds into greater financial confidence. Think of it as an investment in peace of mind and one your future self will thank you for.
Understanding and planning your pension isn’t just about retirement. It’s about control, clarity and building the freedom to enjoy life on your own terms, today and tomorrow.
1Aviva, 2025, 2Standard Life, 2025
The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.