Many of us face a shock at true value of pensions

IGNORANCE about pensions means many of us could face a financial shock when we retire, a report warns.

Research shows three in 10 are overestimating their future state pension payments, some by as much as £50,000 over the course of an average retirement.

Consumer champion Which? says a lack of clear and easily accessible information is contributing to worrying gaps in the nation’s knowledge on retirement payouts.

Which? quizzed 2,000 people on key rules and found that savers struggled to identify what they were entitled to from government.

Fewer than three in 10 (29 per cent) knew or guessed that the average amount the state pension pays is £150 a week, or £7,800 a year.

A quarter (25 per cent) wrongly thought the figure was £175 a week. While this is the full level of the new state pension, not everyone gets this.

The new state pension is paid to men born on or after 6 April 6, 1951, and women born on or after April 6, 1953.

One in 10 wrongly thought that the state pension was worth £200 a week or £10,400 a year. This means people

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may be overestimating by as much as £49,400 over the average length of retirement, from 66 to 85.

When Which? asked what the current state pension age is, just 29 per cent correctly identified it as 66.

Just 38 per cent correctly said 55 was the age at which you can first access your defined contribution, or occupational, pension.

This age will rise to 57 from 2028 due to fears that allowing savers to