Young people can expect to spend their future retirement in poverty.
Malcolm McLean, a consultant at Barnett Waddingham, one of Britain's largest independent firms of actuaries, administrators and consultants. "I don't want to get too apocalyptic but there is a very real problem here and I don't think anyone should be complacent about it." He predict years of "inter-generational strife": a cycle of parents who come to rely on their offspring to provide for them in retirement, hurting that generation's capacity to save for their old age, and so forcing the next generation of children to support them in turn
As living costs and personal debts spiral, people of all ages claim hoarding cash that won't be seen again for decades is out of the question.
Graham is typical. "I am not taking any steps to save money for my retirement as I simply cannot afford it. What I earn is spent on rent, food, petrol, car insurance and necessities. I have no wages left to put into savings. I would like to retire at about 65 years old but by the sounds of it I'll be working well into my seventies."
A survey for the National Association of Pension Funds (NAPF) found that 54 percent of all workers did not trust pensions. Joe Tanner, a 28-year-old software trainer from southeast London has argued with his father about his lack of retirement planning every year since he started work. "So much of what you hear in the press - it's almost like all of your worst paranoid fears and concerns are being reported as truth," he said. "If it isn't about bankers earning more money than most of us would earn in a lifetime, it's MPs buying all sorts with taxpayer money...the idea of me putting my money into those systems doesn't exactly fill me with confidence."
According to NAPF, 70 percent of those saving into a scheme for retirement were doubtful that it would give them enough money to live on in old age. Diligent pensions investment has also backfired badly for many who were missold costly schemes.
Steve Pattenden, a 55-year old has all but given up on retiring after watching more than 35 years of pension contributions turn sour. "I envisage a meager existence now as none of my pensions are worth anything like what they were even four years ago. I'm seriously looking at stopping contributions and cutting my losses," he said.
Pension schemes have become less generous, with defined benefit program being replaced with defined contribution schemes.
A member of a defined benefit (DB) scheme who joined at age 20 and is retiring now at age 60 would expect to receive a pension of around £21,070 a year, based on the average UK salary of £31,600, Barnett Waddingham calculations show. But a member of a defined contribution (DC) scheme making minimum contributions over the same period would have produced a pension of just £13,330 a year. Worse still, Barnett Waddingham estimates the projected DC pension for a 20-year old starting a pension now and paying into it for the next 40 years is only £6,440 in today's money.
"A lot of people are making bold but wholly unfounded assumptions that the state will look after them financially in retirement," Simon Bonnett, head of financial planning at private bank Duncan Lawrie. "You don't know what kind of government is going to be in power when you retire."