Research by Saga Investment Services also found that women underestimate their pension pots by almost two thirds.

Saga’s report found that over 50s felt they would need an average annual income of £15,200 to cover their essential needs in retirement. People who were surveyed estimated that this could be generated from an average pension pot of £143,830.

However, a pension of this size would only generate £7,940 in guaranteed annual income for a 65-year-old, a shortfall of almost 50%, meaning they would need to double their pension to achieve the average annual income target.

The research by Saga also found that women were significantly underestimating their pensions by 66%, whilst men undervalued their pensions by 41%

Over 50’s are also underestimating how much they need to live comfortably in their retirement as well.

An annual income of £21,630 is considered to be required to live at ease in retirement, but over 50s thought that a sum of around £194,000 would be sufficient to achieve this amount.

However, this would only generate a guaranteed annual income of £10,170, a shortfall of around 50%.

Nici Audhlam-Gardiner, managing director of Saga Investment Services, said:

“It’s worrying that Britain’s over 50s are misjudging the level of savings they need to have a decent and comfortable retirement income. Our research found that 80% of people simply couldn’t begin to make an estimate of how much they need to save to get the lifestyle they want, with the result that they are severely low-balling their pension and savings plans.

“It’s vital that people take into consideration all of the financial possibilities, sources of income and investment options to hit their retirement income goals.”