The Association of British Insurers has discovered that 7.4 million workers are investing £27 billion too little for their old age, despite an increase in the number of those who believe it is their responsibility to do so.

“These findings will confound those who argue that the public does not accept the severity of the pensions challenge or is unwilling to face the consequences,” said Joanne Segars, ABI’s head of pensions.

The ABI suggests part of the reason for a lack of investment is the government’s current means tested pensioner’s credit.

Richard Harvey, ABI chairman, noted: “People simply do not know whether they are pouring their hard-earned cash down the drain by saving in a private pension because, by the time they get to retirement, they would be no better off [than someone] . . . who got means-tested benefits.”

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