The pensions industry has been urged to work together to reach a consensus on how to deal with the issue of under saving, after a report from B&CE found that 61 per cent of households and nearly two thirds (63 per cent) of individuals aren’t saving enough for retirement.

The analysis, based on data from the ONS Wealth and Assets Survey, found that 68 per cent of Generation X workers aren’t saving enough, rising to 76 per cent amongst Millenials, compared to just 41 per cent of Baby Boomers.

However, B&CE warned that while Millennials largely have time to make up the shortfall, the country could face a retirement crisis when Generation X retires in significant numbers.

In light of this, the provider has called on the pensions industry, employers and trade unions to form a consensus view on how to deal with the issue of under saving, and to produce a clear set of objectives for the UK pension system.

B&CE director of policy, Phil Brown, commented: “Once Generation X starts to retire in large numbers, the UK could face a retirement savings crisis, with people unable to carry on with anything like their current standard of living.

“While this problem isn’t one that can be solved during the current cost of living crisis, it also shouldn’t be ignored.

"Government, employers and other stakeholders should look seriously at the UK’s pension framework, to gain consensus on the challenges ahead and set objectives for what sort of outcomes the state pension and workplace saving should look to achieve.

“We would be in a much worse position if it were not for automatic enrolment, which has dramatically increased the number of people saving for retirement over the past decade, but now it’s time to ensure it reaches its full potential.”

However, the Pensions and Lifetime Savings Associations (PLSA) noted that while the report is "a helpful contribution to understanding the degree to which people are saving enough to have an adequate retirement income", attempts to improve retirement saving may need to wait, with the cost-of-living crisis raising other priorities for savers.

“During a time of fast rising energy and food bills, for most savers there are far more immediate financial concerns than pensions," commented PLSA director of policy and advocacy, Nigel Peaple.

“While now is not the time for people to increase pension contributions, it is as good a time as any for policymakers to consider whether automatic enrolment contributions should be increased in the future, once the economy has improved, and in a way that will be affordable for savers.”

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