There is a “stark divide” in the level of pension saving amid cost-of-living pressures, with research from MRM revealing that less than half (45 per cent) of savers claim to have a pension, while one in five (21 per cent) have no savings or investments at all.

The latest Money Matters Index from MRM showed that whilst some have no savings, at the opposite end of the scale is a group that can afford to save or invest more.

Indeed, the average monthly amount set aside among this cohort increased by over £500 as a whole from last year, while the average amount invested in pensions and self-invested personal pensions (SIPPs) grew by £110.

Affordability was not the only driver for this, as the research found that perceptions as to how far in advance financial planning is required could be playing into this divide.

On average, respondents felt that forward thinking should stretch to more than three and a half years (43.4 months), yet the same group felt that in reality their plans could only extend to two years (23.5 months).

MRM suggested that this is, in large part, because short-term financial pressures dominate thinking, with paying bills comfortably (50 per cent), paying for a holiday (38 per cent) and paying off credit card debt (24 per cent) sat top of the list of savers' immediate priorities.

"Worryingly", however, having enough money to start saving and investing for retirement was a priority for just 15 per cent of people, while 13 per cent were focussed on being in a position to retire early.

Commenting on the findings, MRM head of institutional, Helena MacPherson, said: “The pain for households has shown little sign of stopping this year, and it’s a huge shame to see this feeding through to pensions.

“What’s most interesting though is the clear divide we’re now starting to see emerge. At the one end of the spectrum is a hard-pressed group not saving anything, while at the other we have a cohort that’s lucky enough to put a little extra aside.”

MacPherson acknowledged that the number of people seemingly without a pension could come down to awareness, suggesting that "it's wholly possible that a chunk of this group has been auto-enrolled into a workplace pension scheme but at this point aren’t aware.

“All the same, with so many people struggling to make a financial plan that extends beyond two years, it’s not looking good for people’s retirement prospects," she clarified.

In light of the findings, MacPherson suggested that the key to getting people thinking further afield is raising awareness of the small, but meaningful, changes that will contribute towards a person’s eventual retirement pot.

“Of course, there will be people who face such financial challenges that they are unable to plan or save at all for retirement," she said.

"But I have every faith that, where possible, the pensions industry will take steps help people to start building in some long-term aims and ambitions on top of their short-term spending. I look forward to seeing how it responds.”

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