Current auto-enrolment contribution levels would see the average person retire with around £22,800 a year after tax if trends continue, just over half (53 per cent) of what is needed to live comfortably in retirement, research from finder.com has found.

According to the Pensions and Lifetime Savings Association’s Retirement Living Standards, a single person needs £31,300 a year for a moderate income and £43,100 a year for a comfortable retirement in today’s money.

Based on this, the research found that current auto-enrolment contribution levels could leave a “shortfall” when targeting a comfortable income in retirement, as the current contribution levels are not “sufficient” to prepare savers for times of economic uncertainty in the future.

The survey also highlighted the impact of auto-enrolment on the gender pension gap, stating that, based on average UK salaries, auto-enrolment is projected to create a “stark” difference of £100,000 in private pension pots when comparing women’s savings to men’s.

The research showed that the average 22-year-old woman will have a private pension pot at age 68 worth over £218,000 in today’s money, compared to £318,000 for the average man.

Furthermore, when combined with the state pension, retirement income for the average woman a year is £19,800 when considering life expectancy, which is £5,500 less than the average man is projected to have (£25,300).

Indeed, for women, projected annual income is less than half (46 per cent) of the income needed for a comfortable retirement and less than two-thirds (63 per cent) of what is needed for a moderate standard of income.

Reflecting on the findings, Finder.com pensions expert, George Sweeney, said that despite auto-enrolment being a “great” start it isn’t a “complete” solution.

He continued: “Our research shows that auto-enrolment is only half the battle (literally), and if people want a comfortable retirement, they need to take ownership and responsibility for the other half.

“To try and make up the difference, there are a few options. The first and most obvious is to try and maximise and increase contributions whenever possible.

“This doesn’t have to be done every month, even sporadic and infrequent increases in contributions (as early as possible) can make a huge difference in bridging the gap to comfort.

“But that strategy isn’t always possible. So, an alternative option everyone can do is making sure their pensions are invested in an appropriately aggressive manner (if they’re a long way off retirement). Doing this can lead to a massive increase in the overall pot size.”

Commenting on the gender pension gap, he also said that “more” discussions need to be had at home between partners, clarifying however, that much of the issue is reliant on changes in the gender pay gap.

“Ideally, leading to better planning around equalising contributions and seeing it as a joint effort - perhaps using additional tools like self-invested personal pensions (SIPPs), especially if a woman is taking time out of work to care for children or family,” he continued.

“Hopefully as the gender pay gap closes, this will be less of an issue, but the reality is what it is, so couples and families need to work together and plan their finances as a team if they want a comfortable retirement.”

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