And many who are saving have an unrealistic idea of how much their pension will ultimately deliver. Why, then, are so many Brits failing to save for the future?
Given the crushing economic conditions many British families are enduring, some of this news is unsurprising. Many people are also suspicious of pensions: their record for performance is under strain following a decade of disappointing stock market returns; the bad smell of several mis-selling scandals still hangs about - and there is considerable concern about charges.
Meanwhile the pensions industry claims every pound of weekly saving a 30 year old makes today will deliver around £3 of income in retirement - but a delay of just five years in starting to save would reduce that retirement income from £3 a week to £2 a week.
"We need to recapture a savings culture in this country; we should all be thinking in terms of 'for every £10 I earn, I'll give £1 to my long term savings'," says Tom McPhail, head of pensions research at Hargreaves Lansdown.
Public sector advantageDespite savings plummeting, aspirations for pension income have actually increased by £200 from 2011 to 2012, claims the new Scottish Widows survey. "The findings show that the average level of annual income people would feel comfortable living on at 70 years-old is now £24,500 compared to £24,300 in 2011."
There are wide regional variations in terms of pension saving. In the North East less than a third (32%) are saving enough. The second weakest region is the South West, where just 38% are making the necessary pension provisions, due, in part to the high proportion of self-employed people based there. Both of these regions have below-average income levels as well.
At the opposite end of the scale, the only regions with more than half saving adequately are Scotland (56%) and Yorkshire & the Humber (54%). "This could be down to the high number of Scots who are employed by large public and private sector organisations, while Yorkshire & the Humber has a high percentage of public sector employees," says Scottish Widows.
High chargesHowever Which? claims pension charges can do a lot to deter saving. if you save £100 a month into a pension scheme charging 1% in charges a year over 40 years, with your money growing by 5% annually, you'd have just over £115,000 in your pension pot Which? says.
"Increase that annual charge to 1.5%, and you would lose out on around £13,000 from your final pension. If charges increased to 2%, a further £10,000 would be lost."