Increased longevity means that those reaching retirement age this year will need at least £130,000 to supplement state pension benefits, according to Prudential.
Britons who will reach retirement age over the next 15 years will need even more in savings than what they can expect to receive in the form of a state pension, the life and pensions company predicts.
It adds that a decline in pensioner income and higher life expectancy means that people saving money towards their retirement pension will need even more savings than before.
The proportion of state pension benefits will have declined to 44 per cent by 2013/14, down from the 50 per cent level at which it is today, Prudential estimates.
By 2020, life expectancy is expected to increase by at least three years, according to official projections by the government.
"Pensioner incomes have risen faster than average earnings over the past eight years, yet today's pensioners are still grappling with a retirement gap which can only grow unless we all take action," urges the executive director of Prudential Roger Ramsden.
He says those currently in retirement pension are "depressingly aware of the retirement gap, which for them is the gap between living a comfortable life and living on the breadline".
Mr Ramsden says that although increased longevity is a good thing, people need to "wake up" to the financial implications of a higher life expectancy.
Retirement needs more savings, Prudential warns
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Retirement needs more savings, Prudential warns
Wed, 15 Feb 2006
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1998 - 2008 UK Pensions - Planning before, at the onset and during retirement.
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