Only 46% of people understand how pensions work, while just 39% are aware of the tax breaks associated with having a pension, new research from Bank of Ireland reveals.
The Bank of Ireland research also shows that 74% of people are putting day-to-day spending ahead of saving for the future, while 62% of pension holders are worried they are not saving enough for their retirement.
As Pensions Awareness Week gets underway this week, Bank of Ireland said that 38% of people are thinking more about retirement planning but only 22% are seeking professional advice in this area.
The bank said a lack of understanding, closing the gap between male and female pension adoption, and "pension inertia" are all obstacles that need to be addressed so that more people can place themselves on a firmer financial footing when they retire from work.
The bank noted that recent Central Bank figures show that household deposits continue to rise according, but short-term saving is still the order of the day for large sections of society.
But it added that this type of saving, which due to the ongoing cost of living challenges is a necessity for many, is failing to adequately fund people's future.
Bank of Ireland said that a mandatory auto-enrolment pension scheme scheduled to come into force next year is a welcome development, as it will lead to improved pensions coverage for over 750,000 workers nationwide.
It noted that while auto-enrolment will apply to employees, workers who are self-employed will still have to arrange their own retirement plans.
Bernard Walsh, Head of Pensions & Investments at Bank of Ireland, said that the lack of understanding of pensions is a recurring theme, as borne out once again by the bank's latest survey.
"It's human nature to shy away from areas believed to be complex, but in doing so we are delaying taking important decisions that are in our best interests and help identify how much people can afford to set aside to enjoy a comfortable retirement," Mr Walsh said.
He said that pension inertia restricts people from making decisions that will help properly fund their future.
Bank of Ireland has launched a new six-episode Pension Pot webinar series, which aims to take people through the basics of saving for the future.
"The series provides easy-to-understand advice and guidance, but also some important considerations for both employers and employees around the impending auto enrolment scheme," Mr Walsh said.
