Three quarters of workers not on track for 'moderate' pension income, report suggests

Too many people face a "cliff-edge drop in income" when they retire, with more than three quarters not on course to save enough for a "moderate" lifestyle, a pensions trade body has warned.

A new report by Pensions UK suggested what it termed a moderate lifestyle cost £32,700 for one person and £45,400 for two - but estimated just 23% of the working population were on course to reach such a level.

Rising bills have pushed up the cost of retirement, it said, adding to calls for action to boost retirement savings.

According to the report, a minimum retirement lifestyle costs around £13,900 annually for a one-person household and £22,500 for two people.

Meanwhile, a comfortable lifestyle in retirement is estimated to cost £45,400 for a single person and £62,700 for a couple. Pensions UK said only 9% of workers in line to get to that level.

The trade body estimates the level of income needed to have a minimum, moderate or comfortable standard of living as a pensioner each year.

The calculations are developed and maintained independently by the Centre for Research in Social Policy at Loughborough University. They are intended as a guide for those planning their retirement savings.

The minimum standard is calculated to include money for a couple's weekly groceries, a week's holiday in the UK, eating out about once a month and some affordable leisure activities about twice a week.