Workers could be forced to work until their mid-80s if they are to enjoy the same level of pension as their parents' generation according to Royal London.
The Death of Retirement report found that someone on double the average national wage contributing 8% would need to work until the age of 85 if they were to enjoy the ‘gold standard' of 67% of pre-retirement income. If they wished to live on the silver standard of 50% of pre-retirement income they would have to work until age 80.
The research found that someone on average earnings would need to work until they were 77 if they were contributing at the statutory minimum level and wanted to secure inflation protection and provision for a spouse.
These figures are based on someone who earns the national average wage of £27,600, who is automatically enrolled at the age of 22 and saves the minimum contribution of 8%.
However, individuals who start saving at the age of 35, which according to Royal London is a more realistic scenario, can expect to work until 79 to receive the gold standard, or 73 to receive the silver standard.
The report says the problem of an inadequate pension is solved by increasing contribution levels. In the case of an average earner, Royal London suggests that 25.1% is saved to attain a gold standard, while 13.8% is needed to reach the silver standard. This is for index-linked pensions with survivor benefits.
The report warns that people may not be able to afford to retire at all unless contributions are increased.
Royal London director of policy Steve Webb (pictured) said: "Getting millions more people saving through automatic enrolment is a huge step forward, but many face a cruel disappointment if they think that current minimum contribution levels will deliver them the sort of retirement they are looking for. Without significant increases in contributions, we could be witnessing the death of retirement.
"This report shows that today's workers are unlikely to be able to secure the quality of pension provision enjoyed by many in previous generations without either working well beyond pension age or contributing substantially more. Even those who save systematically from the start of their working life could face working into their late seventies if they want to replicate the best pensions of those retiring today."
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