Nearly half of under 45s believe that a £100,000 savings pot would be enough to last retirement, even though this would provide an income of just £5,400 a year, new research suggests.
A Sanlam report estimates that a pot of £480,000 would actually be needed for a comfortable retirement.
A third do not think they will be able to meet their pension pot goal, and a similar number are put off saving because they expect to receive an inheritance.
A third of under-45s currently have less than £10,000 in their pension pot, and 24 per cent do not know its value.
However, older savers also appear underprepared for retirement. A fifth reported that they don’t have any savings in their pensions, and 22 per cent are unsure of how much is in their workplace pension.
Sanlam UK senior wealth planner Carl Drummond says: “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 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.
“Our research highlights that many under-45s see inheritance as a panacea, but that’s a big gamble. Money being passed down from parents or grandparents is often split-up among other family members or, increasingly, used to pay for care costs meaning the under-45s might not inherit what they expect.”