New research by the mutual ‘Pensions Through the Ages – Generation 2050 and beyond’ also forecasts that the cost of living in retirement is forecast to soar by nearly 150%.

The current average monthly expenditure of a pensioner today, who is not reliant on the state pension, is £1084 a month and this is set to increase to £2930 a month by 2050, an increase of 148%, Royal London forecasts.

The figures are based on calculations commissioned by Royal London from the Centre of Economics and Business Research, (CeBR) based on the cost of essential items such as housing, food, heating and transport – so no added luxuries. This means that today’s average 35 year old, who is halfway to possible retirement in 2050 and who will represent 1 in 4 of the UK population aged 65 or over at that time, will need to build up a fund of at least £666,000 not taking into account any state pension existing at that time. This is to be able to secure a monthly income which will only just maintain the same standard of living of today’s retirees.

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The research found that today’s 30 – 40 year olds have a median pension pot of only £14,000, well short of the fund they require to secure a monthly income that will just cover the basic £1715 cost of essentials in 2050.

Fiona Tait, pensions specialist at Royal London, said: “The scale of the challenge facing today’s 18-40 year olds to secure an adequate income for their retirement, potentially from 2050 and beyond, is quite frightening.

“Royal London research highlights the level of income that people should aim to secure for their retirement if they wish to be able to maintain a reasonable standard of living. However, it is very likely that future pensioner spending will be higher than this and so they need to start saving more now.”

The report provides intergenerational insight into the saving and spending habits of today’s retirees, those aged 65–75, compared with those aged between 18-40, who could choose to retire in 2050 and beyond. It outlines some of the challenges facing today’s younger generations and how pensioner spending will change.

Key findings from the report show that:

• 60% of those surveyed aged 30-40 do have a pension in place. This is similar to the number of today’s retirees.
• Of those in their 30s who have a pension in place, the average age that they started saving for their retirement was 27. In comparison, today’s retirees said that they started their pension savings at an average age of 31, four years later.
• The research also established that Brits in their 30s believe that on average they will need 60% of their salary to live on in retirement. In contrast, the reality is that today’s retirees, those aged 65-75 year olds, are on average having to survive on less than half, (48%) of their pre-retirement salary as their income.
• Over half (54%) of 30-40 years olds not saving for retirement say it’s because they can’t afford to.
• The biggest single piece of financial advice that 65-75 year olds would give those in their 30s is to start saving as soon as possible, (27%).

Research was conducted by Harris Interactive with 3,060 UK adults in August 2015.