The number of people saving adequately for retirement has reached an all-time low, according to a report from Scottish Widows.
Only 45% of those who could and should be preparing financially for their old age are currently saving enough. One in five Britons (20%) is saving nothing at all for retirement and over one third are under-saving, the study of 5,200 adults found.
Ian Naismith, pensions expert at Scottish Widows, said savers faced a 'triple whammy of economic uncertainty'. The weak economy made saving for the long term difficult, the age of first-time house buyers was rising and the population was ageing.
'These factors combined create a perfect storm for those heading towards retirement. Whilst we are becoming more aware of the need to save for retirement, we must do more to ensure that we have a comfortable old age,' he said.
Despite pension provision falling for the past two years, aspirations for retirement income have increased substantially. The findings show that, on average, survey respondents would feel comfortable living on an income of £25,200 at 70-years old - a rise of £700 on the 2012 figure.
But, based on average savings levels, someone retiring at 65 is likely to receive an annual pension of just £3,860. Even with the addition of the state pension, this still falls well short of the £25,200 target figure.
Scottish Widows suggested people would be preparing 'adequately for old age if they were saving at least 12% of income or expecting their main retirement pot to come from a defined benefit pension.
'As a nation, we must either prioritise saving for the future and prepare accordingly, or seriously adjust our outlook for old age,' warned Naismith.
The Scottish Widows 2013 Pensions Report suggests three options for savers to improve the situation: start saving at a younger age, save more or retire later than planned.
'Whilst starting saving as soon as possible is highly desirable, and increasing contributions as retirement approaches is almost essential, the biggest single difference can come from postponing retirement,' said Naismith.
'The issue is whether a nation that aspires to stop working at 62 and have an annual income of £25,200 can accept this change.'
