Planning for retirement is one of the most important things you can do — there are all kinds of rules of thumb around how much you should pay in and how much you need to have saved. However, according to our latest research, almost one in five people have no idea how much they’re contributing to their pension.

It gets worse the older we get, with one-third of people aged over 55 having no clue about what they and their employer are putting in. If you don’t know what’s going in then you won’t know what you are going to get out of your pension, and so we risk people sleepwalking into retirement and getting a nasty shock when they realise they can’t afford the lifestyle they’d hoped for.

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Having an idea of what you want your retirement to look like can help you get a sense of how much you need to get there. Recent data from Hargreaves Lansdown's (HL) Savings and Resilience Barometer puts the cost of a moderate retirement income at £25,000 per year for a single person.

This would cover all your basics with extra left over for nice things such as a week away in Europe every year and the means to run a car. However, everyone’s expectations will be different, and you may need more or less than this. You can use online calculators to check if you are on track with your savings and if you aren’t, you can use these tools to model the impact of putting extra money in.

It’s also worth saying that if you have no idea about how much is going in then you won’t be aware of the contribution that either the government or your employer is making to your retirement. You will receive a government top-up in the form of pension tax relief on your pension contributions meaning that every £100 a basic-rate taxpayer pays into their pension only costs them £80. For higher-rate taxpayers it’s an even better deal as the same contribution only costs them £60.

The employer contribution can also be significant. Under auto-enrolment, employers have to pay a minimum of 3% into employee pensions. Some will pay more and over time this can make a significant impact on what you end up with.

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Some employers will even pay in more if you hike your own contribution. This is the so-called employer match and this can have a huge effect on your retirement if you are able to afford the extra contributions.

The final step in planning your retirement is to not forget the impact of the state pension. A full new state pension is worth more than £11,500 per year so it forms a firm foundation on which you can make a plan.