Less than a third (30 per cent) of higher earners are on track for a comfortable retirement, falling to 13 per cent amongst households overall, according to the latest Hargreaves Lansdown Savings and Resilience Barometer .

The research showed that, when it comes to achieving a moderate retirement income, only 69 per cent of higher income households are on track, compared to 39 per cent of households overall.

The analysis was based on the Pensions and Lifetime Savings Associations’ (PLSA) retirement living standards, which puts a moderate standard of living at £23,300 for a single person and £34,000 for a couple per year.

In light of the findings, Hargreaves Lansdown warned that many higher income households may have to significantly reduce their expenditure in retirement from what they are used to in their working lives.

Indeed, Hargreaves Lansdown head of retirement analysis, Helen Morrissey, argued there could be a “shock in store for higher earners”, warning that “if you’ve been used to having plenty of money during your working life, then you could face a nasty surprise if you enter retirement and find your pension cannot sustain the lifestyle you’ve become accustomed to”.

“The problem is compounded when we look at the percentage of high earning households on track for moderate retirement income,” she added, clarifying that even for those that are on track, the likelihood is that a moderate income will nowhere near meet their needs.

Morrissey continued: “The PLSA’s moderate retirement income is pegged at £23,300 per year for a single person and £34,000 for a couple.

“If you’ve been used to lavish holidays a couple of times a year, then the two weeks in Europe afforded under this standard just isn’t going to cut it and you are going to need to make some difficult decisions on your spending.

“This version of the barometer has shown the financial resilience gap between higher and lower earners continuing to widen. Higher earners have seen their overall resilience improve in stark contrast to lower paid households.

“If these households are in a position where they can save more, then boosting contributions into a pension should be an important consideration.

"Keeping track of how your pension planning is progressing is really important. You need to think about what you want from retirement and put a plan in place to help you get there. “

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