A quarter of over-55s don't have a pension
A quarter of over 55s earning a salary are not paying into a pension, research from Confused.com has revealed.
Among those who don't have a pension, less than one in five (17.5%) of all earning adults in the UK have any other investments to fall back on either.
There seems to be a knowledge gap when it comes to retirement too, with nearly half (43%) admitting they don't know what an annuity is.
Meanwhile, 26% of people didn't know they could take a lump sum payment from their pension fund at retirement.
The lack of preparation is worrying, given that 12% of over 55s says they expect to still be in debt when they retire.
"With potentially no income and reliant on a state pension of £110.151 a week, these over 55s are likely to struggle to cover increasing costs of living and also pay off outstanding debts," said Confused.com.
Kate Rose, head of annuities at Confused.com, added: "Retirement should be the time when we put our feet up and enjoy life after decades of work; yet so many of us are underprepared. It's staggering that so many people due to retire in the next 10 years are unaware of their options.
"Buying an annuity is a once-in-a-lifetime purchase, and getting it right is essential. By shopping around, not only can you ensure you're getting the right policy for you, but by opting to answer just a few extra questions regarding your health and lifestyle, you could achieve up to 40% more income per year."
In exchange for any lump sum – usually your pension fund – an annuity is “bought” from an insurance company and provides an income for life. When you die, the income stops. Annuity rates fluctuate daily and depend on your sex (although from 21 December 2012 insurers will no longer be able to use gender as a factor when calculating annuities), age, health and a number of other factors, so you have to pick the right one and, once bought, its terms cannot be altered, so seek financial advice.