The life company’s ninth annual Pension Report said a ‘triple-whammy’ of economic uncertainty is making to difficult to save for the long term and highlighted many more pensioners are retiring in debt.

The study of 5,200 adults found fewer than half (45%) are saving enough for retirement. It said one in five are saving nothing at all and more than a third are undersaving either ‘somewhat’ or ‘severely’.

Scottish Widows said despite UK pension provision falling to a lower level now than at the height of the recession (adequate provision stood at 54% in 2009) the nation’s aspirations for their retirement income have actually increased by £700 per annum from 2012 to 2013.

The findings show that the average level of annual income people would feel comfortable living on at 70 is now £25,200 (from £24,500 in 2012).

Scottish Widows pensions expert Ian Naismith said: “We are being hit with a triple- whammy of, firstly, continued economic uncertainty making it difficult to save for the long- term; secondly the age of first time buyers is rising as we face troubles getting on the property ladder and thirdly an ageing population.

“These factors combined create a perfect storm for those heading towards retirement. While 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 added: “People are now less prepared for retirement than at the height of the downturn a few years ago, yet expectations for income in retirement are still increasing. To meet these aspirations, an average saver would need to save £12,000 a year, or £1,000 per month. As a nation we must either prioritise saving for the future and prepare accordingly, or seriously adjust our outlook for old age.”

The report outlines three new approaches to retirement – start saving at a younger age, save more, or retire later than planned.

Naismith added: “While 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.

“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.”