There is a “shock in store” for high-earning households as only 39 per cent are currently on track for a comfortable retirement income, according to analysis by Hargreaves Lansdown.

Its Savings and Resilience Barometer, which moved away from the Pensions and Lifetime Savings Association’s Retirement Living Standards due to methodology changes, put a comfortable retirement income at £38,662 a year for single people and £58,480 for couples.

Using these figures, only 18 per cent of households overall are on track for a comfortable retirement income.

Meanwhile, more than two-thirds (69 per cent) of high-earning households are on track for a moderate retirement income of £25,000 a year for single people and £36,480 for couples.

Just under two fifths (39 per cent) of households overall are on track for a moderate income in retirement.

Hargreaves Lansdown head of retirement analysis, Helen Morrissey, said that while, on the face of it, more than two-thirds of higher earners being on track for a moderate retirement looks good, if you dig a bit deeper there’s a “nasty shock” in store.

“A moderate retirement costs £25,000 per year for a single person and £36,480 for a couple, and the reality is higher earners will be used to spending much more than that,” Morrissey stated.

“Our modelling puts the cost of a comfortable retirement income at £38,662 per year for a single person and £58,480 for a couple.

“This is probably far closer to meeting the lifestyle expectations of higher earners, but with only 39 per cent of this group on track, it means there are some tough decisions in store for many unless they can start plugging the gaps in their SIPPs and workplace pensions.

“Overall, only 38 per cent of households are on track for a moderate retirement income and just 18 per cent are on track for a comfortable one as defined by the Barometer – it’s clear there is still much that needs to be done across the board.”

---