Pensioners would need an annual income of £17,500 for a modest but comfortable lifestyle in retirement, Barclays Corporate and Employer Solutions claimed in a report published today.
Its research, Steps towards a living problem, polled 2,000 employees paying into a workplace defined contribution pension and found top three 'must haves' for a desirable lifestyle in later life, in addition to essential living costs.
They were: being able to pay off money owed; taking an annual two-week holiday abroad; and being able to run a car.
But this figure changed across generations, from £18,200 for 19-33 year olds, £17,200 for 34-53 year olds and £17,300 for 54-69 year olds, said the firm.
Jonathan Parker, Barclays' head of investment proposition, said: 'The research found that people's expectations for their retirement are relatively modest and the report suggests that a gradual increase of the automatic enrolment minimum contribution rates from 8% to 12% over time, coupled with greater education and guidance in the workplace could steer DC members towards better outcomes.'
Elsewhere in the report, 93% of those polled agreed that individuals should bear the responsibility for ensuring they have enough money to live on in retirement, but noted that they were also looking for support from the state and from their employer.
Two-thirds of respondents believe that this responsibility should be shared with government and almost half (47%) said they would look to their employer to play the role.
As a result, more guidance is needed, the report said. Eighty-two per cent of DC scheme members said they would welcome help from their employer, specifically to build a wider understanding of what their current and future contribution mean for what they will have in retirement and how it stacks up against their lifestyle expectations.
The report found that 70% would welcome personalised emails about saving which emphasise what they stand to lose by not contributing and 67% want to authorise their employer to increase their savings at the time of their next pay rise.
'This report shows that, while people believe that it is their responsibly to make sure they have enough money to live on in their retirement, they can be anxious about making decisions around pensions and may not feel equipped to make a plan alone,' Parker continued.
'There is a clear role here for the employer to offer this much sought-after support and guidance.'