Nearly half (49%) of UK workers are not putting enough money away to provide for them during retirement, and one in five are not saving anything at all, according to report by Scottish Widows.
It is suggested that, on average, an annual retirement income of £24,300 is required to live comfortably (this is down from £27,000 before the recession).
Although three-quarters of people questioned said that they understood the need to set money aside for their future, only 51% of people are actually saving enough. This drops to around 25% when those with a final salary pension are excluded.
Scottish Widows have suggested that we should save around 12% of our monthly income in order to live comfortably, however it has found that more people save around the 9% mark.
Ian Naismith of Scottish Widows said: "Put simply, people need to save an extra £58 per month on average to prepare adequately for retirement and make up the shortfall we are seeing currently. That is roughly the cost of a cup of coffee every day.
"Even though for many this is realistic, and is in under the average £97.10 per month people say they can afford, we appreciate the difficulty in setting aside extra money. It's about breaking through that inertia. And for some the amount that needs to be saved will be higher but it's about taking small steps, getting on to the savings ladder and, more importantly, staying on it. Much higher saving levels are needed to get towards the average £24,300 a year people aspire to. The message is that everyone should be putting aside as much as they can afford for their retirement."
Tom McPhail, pension expert with independent financial adviser Hargreaves Lansdown said that according to Office for National Statistics figures, the average pension savings of people retiring between the ages of 50 to 64 last year was £91,900, enough to produce an annual income of about £3,500 to £4,000 depending on your sex and the type of annuity you buy. "To produce an income of about £24,000, you would need a pension pot of about £400,000 once the state pension has been taken into account," he said. "People today face a very simple choice: to save more, retire later, or live on less in retirement."
