The Scottish Widows Retirement Report revealed that outside of pension savings, people are saving on average £142 a month towards their retirement, rising 8 per cent from £130 last year. Almost one in five (19 per cent) expect to save more over the next 12 months and 40 per cent feel positive about their long-term financial situation, up from 37 per cent last year.

For the first time in 10 years, the average proportion of earnings being put away each month towards retirement has reached the 12 per cent recommended by Scottish Widows – more than twice the level in 2006 (6 per cent) and a third higher than in 2013 (9 per cent).

However, the number of non-savers has remained stubbornly high, in spite of the recent raft of reforms designed to shift retirement planning higher up the nation’s financial agenda. One in five people (20 per cent) – around 6.2million – are not saving at all for retirement, the same level as recorded in 2009. A similar proportion of people have no savings or investments whatsoever, increasing from 17 per cent last year to 19 per cent.

The research found that the savings gap is widening among the self-employed and those working for small businesses, with 39 per cent of self-employed people and 30 per cent working in a small business not saving anything at all, up significantly from 23 per cent last year.

Meanwhile 43 per cent of those with annual personal incomes under £10,000 are failing to save anything for retirement, compared to 24 per cent of those earning up to £30,000 and just 9 per cent of those earning more than £30,000 a year.

The study of 5,000 UK adults highlighted a clear disparity between expectations of retirement income and the reality of how far savings will stretch. Whilst the average income Britons aged 30-65 believe they would need to feel comfortable in retirement is £23,469, people saving at the current average level can expect an annual income of £15,600 in retirement – an annual shortfall of over £7,800.

Ian Naismith, retirement expert at Scottish Widows, said: “Since we began our research over a decade ago, a record proportion of people are now saving adequately for the future, showing that the unprecedented changes in the pensions industry have gone some way to engage the nation with retirement saving.

“Despite the positive signs, causes for concern remain, as savings levels among the self-employed and those working for small employers declined this year. The final years of rolling out automatic enrolment will be crucial as it reaches those who have previously not had the opportunity to participate in a workplace pension.”

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