The Working Lives report interviewed 4,012 private sector employees and 760 public sector employees, which took place in two waves - producing the first report in Q2 2012 and this report in Q1 2013.
It states the success of auto enrolment "hangs in the balance" as many workers focus on making ends meet in challenging economic times.
The report found that employee awareness about automatic enrolment (59%) has almost double compared to 31% in May 2012 when the first Working Lives report was released. However, UK workers do not show any more sign that they are likely to actively start saving for retirement.
It revealed 37% say they will opt out when they are automatically enrolled, which is unchanged from May 2012, and an increasing number (28%) are undecided (up seven percentage points from 21% in May 2012). Slightly fewer employees plan to stay in their employers' schemes (36%, down seven percentage points on 43% in May 2012).
Despite this uncertainty, there are early signs that UK workers can see the benefits of the pension reforms, with almost two-thirds (65%) saying automatic enrolment will encourage saving.
However, almost half (45%) of employees who do not contribute to a workplace scheme they are currently offered say they simply cannot afford to. Nearly one in five (19%) say they do not save into a pension because they are repaying debts and 17% are saving for other things, such as a house or a holiday.
Two-thirds of employees (65%) say their key workplace concern remains how their pay compares to the cost of living (up from 53% in May 2012), and 65% say their salary is the most important aspect of their job (up 15 percentage points on 50% in May 2012).
For 55% of employees - a pay increase would encourage them to save more. However, rather than focusing on pay increases, a third of employers (32%) are looking for ways over the next year to motivate employees without unduly increasing remuneration.
As they tighten their financial belts, an increasing number of employers (19%) are concerned about cutting jobs (up from 6% in May 2012), and over the next 12 months 20% are focused on maintaining headcount despite the economic downturn (up eight percentage points on 12% in May 2012).
Confidence in the UK economy is lower among employees than employers, with 60% of workers saying they are 'not very' or 'not at all' confident, compared to 45% of employers.
Only 37% of employees are confident about their personal financial situation, whereas 68% of employers are 'extremely' or 'quite' confident in their businesses' financial situation.
Mark Noble, Aviva's managing director health and corporate benefits, said: "Getting millions more people saving for retirement for the first time during difficult times is a real challenge - but automatic enrolment presents us with a once in a generation opportunity to get this right.
"Automatic enrolment will only become game-changing if employers, their advisers and the wider industry create sustained communications and engagement in the workplace to encourage employees to save.
"It's about understanding the needs and the circumstances of the actual employees in each business, not as a single group but in an individual way through face-to-face conversations and personalised planning tools."
