A RECORD number of employees are paying into workplace pension schemes, yet close to a half of all adults are not saving enough for retirement, with women particularly at risk of spending old age in poverty.

Thanks largely to auto-enrolment, the latest figures from the Office for National Statistics (ONS) show that total membership of UK occupational plans rose from 39.2 million people in 2016 to 41.1 million in 2017.

All staff aged between 22 and state pension age earning more than £10,000 a year are now automatically enrolled in their workplace scheme, benefiting from tax relief on their monthly investments and a contribution from their employer.

Those who do not want to save must actively opt out, while anyone earning less than £10,000 can opt in.

However, according to Scottish Widows, 45 per cent of the working population are still putting away too little, with 17% making no financial preparation for old age.

Robert Cochran, a retirement expert with the fund provider, said: “For many people, pensions are confusing and they don’t know where to begin with understanding their own pension.”

Despite the rise in workplace participation, the average amount saved by those in private sector schemes, including employer’s contributions, fell from 4.2% of earnings in 2016 to 3.4% last year.

The next annual ONS survey will show an improvement, as the minimum contribution rose to 5% this April, made up of 2% from the employer and 3% from the employee.

A further increase to 8% – 3% from the employer and 5% from the employee – will come into effect in April 2019.

But to live happily in later life, most people will need to put aside considerably more.

Clare Moffat, head of business development at pension provider Royal London, said: “The increase in the minimum contribution for auto-enrolment will help, but as it stands, these increases will still not be enough to deliver a decent retirement income for the majority.

“People need to start thinking about the type of retirement they want to have and how much they need to save to achieve it.”

Consumer organisation Which? puts the income required to provide a comfortable old age at £26,000 a year, and financial services provider Sanlam UK estimates it would take a pension pot of £480,000 to generate that sum.

However, two-fifths of those aged under 45 think savings of only £100,000 would be sufficient to fund their retirement, an amount that would actually produce just £5,400 of annual income.

The state pension will make up only a fraction of the shortfall and many of today’s employees will be 68 or older before they qualify.

The current maximum payout is just £164.35 a week, or £8,546.20 a year, and this requires at least 35 years of national insurance contributions.

Those with a shorter national insurance record could get considerably less. A retiree who had made 20 years of payments might receive a state pension of less than £94 a week.

To avoid penury, experts typically recommend putting away at least 12 per cent of income. For someone earning £30,000 a year, this equates to £300 a month.

ONS projections adjusted for inflation show the average pension pot for a man currently aged between 25 and 34 will be worth £142,836 when they are 68. This falls to £126,784 for women, a gender gap of almost 11%.

Samantha Seaton, chief executive of website Moneyhub, said: “More than half – 57% – of women in the UK worry they won’t be able to afford the basic necessities in retirement, and a further 53% either don’t know how much they are saving each month or haven’t even started.”

Maike Currie, investment director at Fidelity International, said: “By the time women are nearing retirement and aged 55 to 64, our pension pots are on average half the size of a man’s the same age.

“Yet our life expectancy is longer than that of men, meaning we may require more care in old age and must make our money stretch over a longer time. Our research found that if a woman contributed an extra 1% of her salary to her pension then she could close the gender pension gap by retirement.”

Those not eligible for a company scheme should consult an independent adviser about starting a private one. For a forecast of state entitlement, go to Gov.uk/check-state-pension.

To work out how much income current state and work or personal pensions might generate, and what additional savings could be worth, see the calculator at Moneyadviceservice.org.uk.