33% of adults in the UK have no pension provision according to a new report, leaving 20.5 million people planning to rely exclusively on a state pension to help fund their retirement.

The OnePoll survey for Scottish Friendly also found that, while 59% of people in the UK are currently saving money each month, with two thirds of them currently saving into an ISA, few are doing so with the intention of using their savings to fund their retirement.

Only 3% of those surveyed said that saving for their retirement was a top financial priority at the moment.

27% intend to rely upon a company pension scheme to fund their retirement, while only 4% are using an ISA as an alternative retirement income solution.

The Disposable Income Index is a report commissioned by Scottish Friendly to examine people’s attitude towards saving and investing on a quarterly basis.

Neil Lovatt, financial products director at Scottish Friendly, said: “Pensions clearly have a role in saving for retirement, and we applaud the Government’s recent proposals to make pensions more flexible and accessible. However, we feel that an ‘ISAs first, pensions second’ strategy could serve some people better. Even though the government’s proposals are an improvement on the previous system, people who have invested in a pension still have their money tied up until they reach a certain age. By investing in ISAs, consumers have a more flexible route to retirement planning.

“By moving savings into a pension later in life it’s locked up for a shorter period of time. It’s important to remember that savers will also have a much better idea of the tax landscape at that time. An ISA is a good option for anyone who is starting to think about the best way to start building a retirement fund, especially those on lower incomes. Any contribution to an ISA, even as little as £10 per month, is a good place to start. If you use your ISA first you can benefit from the access and flexibility it provides throughout your retirement.”