Independent financial advisers (IFAs) believe that 70 per cent of their customers do not have enough money saved for their desired level of income in retirement, new research has revealed.

The survey of 876 financial advisers, conducted by investment platform Skandia, suggests that there is a pension funding gap in the UK.

Advisers have said that customers would need to pay, on average, 56 per cent more to their current pension contribution in order to plug this gap.

Some 47 per cent of financial advisers said the main reason for this problem was that their customers are unable to afford to save enough towards their pension pot.

The next most popular reason, with a quarter of votes, revealed that people are leaving it too late to start a pension scheme.

According to Skandia, if someone starts a pension at the age of 25 and invests £201 each month, they could expect to accumulate a pension fund of £594,000 at age 65, which would give them a pension income of £37,719 per annum.

However, by delaying investing in a pension fund by ten years, the amount saved at the time of retirement could be halved, and pension income would fall to £17,717 per annum.

Adrian Walker, pension expert at Skandia, commented, ‘Even if someone cannot afford to save very much, the compound effect of starting to invest at a younger age can make a big difference.

‘With the projected start of auto-enrolment due to be passed in from October next year there will be an increasing opportunity to invest in a pension arrangement supported by contributions that an employer must make.’

He added, ‘At the very least, younger employees should take up this opportunity to benefit from the employer contributions they would otherwise lose out on.’