The average non-retired UK person expects living expenses to account for 38% of their annual retirement income, but those already in retirement say living expenses represented 53% of their expenditure.

When it comes to income in retirement, the study by Schroders found that UK adults aged 55 and over expect to need an income equivalent to 66% of their current salary to live comfortably in their later years.

But those already retired said they actually receive less – just 53% of their final salary. And just 52% of these retirees said this is sufficient to live comfortably. Two fifths said they could use a bit more income, while one in 10 said they don’t have enough of an income to live comfortably.

As part of the study – a survey of over 22,000 people globally, including 1,000 from the UK – non-retired people in Europe expect living expenses to account for 35% of their retirement income. But the reality is that they spend closer to 50%.

On a global basis, non-retired people expect to spend 34% on living expenses, compared to the 49% actually spent, according to retirees.

Lesley-Ann Morgan, head of retirement at Schroders, said there is a real danger that people globally are underestimating their basic living expenses and the level of income they will need to live comfortably in retirement, particularly in the current environment of low returns and increasing inflation.

“There is no magic wand for savers. To avoid facing challenging financial circumstances on retirement, they need to recognise the need to start saving as much and as early as possible.

“Leaving retirement saving until you are nearing your 50s and 60s is likely to be too late to make up a savings gap,” she said.