More than 12 million UK workers face retiring on inadequate incomes even with the introduction of compulsory pension saving, according to official government estimates.
In a report that highlights the size of the challenge facing the government to get people saving, some 12.2million adults currently of working age are likely to suffer a significant drop in income when they come to retire, the Daily Mail reports.
Middle and higher earners will be particularly affected, as they will find it hard to save what they need to provide an adequate replacement income.
The Government's automatic enrolment programme is expected to bring up to 10million workers onto workplace pensions, but even with this landmark project rolled out, many workers are not be saving enough to provide a comfortable lifestyle in retirement.
In fact, the Department for Work and Pensions report says that at current savings levels, auto-enrolment combined with the new, flat-rate state pension, will only do enough to ensure that just one million extra people are brought onto adequate retirement incomes.
The report said: "With the Government's reforms in place, over half of people currently of working age considered in our analysis are expected to build adequate retirement incomes and maintain their living standards during retirement.
"However, this leaves an estimated 12.2 million people facing inadequate retirement incomes. Roughly half of these are within 20 per cent of their target amount, with the remainder facing a more significant challenge."
The pension reforms being brought in by the government will bring more people closer to their 'retirement targets', the report says, with an estimated 9.6 million people better off.
But complacency among middle and higher earners regarding pension saving could come back to haunt them as they hit the retirement age, with the DWP estimating that around 378,000 people earning more than £35,400-a-year could end up among the poorest 20% in retirement.
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