This week millions of workers will be forced to save more into a pension, as “auto-enrolment” takes a 3% cut from pay packets, and employers are obliged to chip in a further 2% of salary. Next year it will rise to a total of 8%. It’s not a lot, but it’s a start.

Now comes the much bigger challenge: making the money you save last two, and possibly three, decades of retirement.

In the past, employees in final salary-based schemes had certainty about the income they would receive annually, and the security that it would be paid every year until their death. Now, outside of the public sector, that security has all but vanished. “Here’s the £106,000 you saved. Cheerio and good luck to you” is, basically, what you’re going to hear. £106,000, by the way, is the average amount 55- to 65-year-olds currently have saved in a workplace “defined contribution” pension, according to pension company Aegon.

Will you get much advice? Probably not – many professional advisers will turn their noses up at such small sums (to them). And finding a decent adviser is a lottery in itself.

No, you’ll be left largely alone to navigate a world of “drawdown” plans, investment options, “uncrystalised” funds, annuities, and how and when to take the 25% tax-free lump sum.

You will also need to learn an ugly new word – “decumulation” – and take some big guesses about your health and longevity. The single biggest problem with managing your money in retirement is that you don’t know when you’ll die, or whether or not you will need expensive long-term care.

The potential for rip-offs is enormous. That’s why the pension minister, Guy Opperman, must take on board recommendations this week from the work and pensions select committee and create a low-cost deal at retirement which is as automatic as the current enrolment system.

The weirdness of our market-based pension system is that Nest, the government-owned body that delivers auto-enrolment for many small employers, is forbidden from offering drawdown or other decumulation plans. Why? Because they will probably do it cheaper than the profit-seeking private companies.

This nonsense has to end. Nest must provide a low-cost benchmark service for managing your money through retirement – and in effect force the private companies to fall in line.

The work and pensions committee has proposed a sensible 0.75% a year charging cap for drawdown, which has prompted caterwauling from the private pension providers that a “one size fits all” service won’t work. But the well-off can do what they like – this is about providing cheap no-nonsense drawdown plans for those who have saved relatively little through auto-enrolment.

But none of this is going to lessen the challenge of saving enough first. The grim reality is that while £106,000 sounds like a lot of money, it is peanuts when it comes to pensions. It will give you an income of less than £5,000 a year in retirement – and leaves you wide open to the vagaries of inflation and any stock market collapses. If you want an income of £25,000 a year in retirement – consisting of £8,300-a-year state pension as well as a £16,700-a-year private pension – that many say is the benchmark for a decent life, you will have to save north of £300,000.

But don’t get too depressed – if you are a couple, both 40, with no savings so far, but can stretch to putting aside £40 per week each into a pension scheme, then it’s (just) possible to hit the £25,000 a year target income that many experts say is what you need in retirement. Good luck.