One fifth of Brits believe they could live on less than £50,000 in retirement, but that shows their misunderstanding of pensions, a report from Friends Provident said.

The Friends Provident Lasting Lifestyles report said that £50,000 would give pensioners just £44.24 a week – just over a quarter of the minimum wage. It claimed this showed the shocking lack of consumer understanding about pensions and saving for retirement.

It claimed that having only £50,000 to fund the whole of retirement would actually only provide an average of £6.32 per day – and while it said this may just be enough to buy a pint of milk, some cheese, tea bags, a white sliced loaf and a pint of beer – and that’s before taking into account any other financial considerations, such as housing, bills and other unexpected expenses.

At the moment people can rely on the State pension to top up the amount they have to live on by £84.25 per week, which would give somebody with a £50,000 pension pot £128.49 to live on each week – still less than the minimum wage.

Jeremy Ward, head of pensions marketing at Friends Provident said: “The continued lack of understanding of pensions is a serious issue and by ignoring this, the British people are facing a pension time bomb.

“Despite the importance of saving for retirement having a high media profile in recent months, the message still isn’t getting through and consumers are still confused about when they should start saving and how much they should put away each month. This is a wake up call for consumers to start saving sooner rather than regretting it later.”