UK pensions gap 'highest in Europe' claim questioned

This money would compensate for a £318bn shortfall, calculated on the basis of the pensions individuals retiring between 2011 and 2051 can currently expect.

This gap is the largest in Europe, the insurer found, followed by Germany (£9,700) and Ireland (£7,600).

Toby Strauss, chief executive at Aviva's UK Life, said: “We know from our research that many people in the UK are planning to work later into life, but this will not solve the issue fully. However, the problem is not without solution. By investing from an early age, even a small amount can make a big difference in closing the gap.”

James Walsh, senior policy adviser at the National Association of Pension Funds, said the UK was facing a pensions crisis and the findings of the report highlighted the challenges of undersaving.

"We don't think that extra European legislation will help alleviate the problem. The UK already has a well regulated pensions’ infrastructure. The main thing is to get people saving more," he added.

However, several consultants questioned both the outcome of the study and the assumptions on which it is based.

Con Keating (pictured), head of research at BrightonRock Group, said with median gross pre-tax earnings for men at £27,600 and for women at just 22,100, it was “a patent nonsense to suggest savings of more than £10,000 could be feasible, let alone desirable".

And Ros Altmann, independent consultant, said it was “astonishing” the study assumed the number of people in the age band 60-64 remained stable over the next 30 years.

She said: “We know that the baby boomers are reaching age 65 from next year on and hugely increased numbers of over 60s will be coming through in the next decade.”

The latest statistics released by the Department for Work and Pensions show 800,000 people will celebrate their 65th birthday in 2012 – 150,000 more than in 2011.

Altmann added: “They [Aviva] assume no inflation and no interest earned on savings. These assumptions are very odd and somewhat undermine the validity of the figures.”

The study also assumed a 70% replacement rate – the ratio between an individual’s average pension divided by his average salary. Aviva said it chose this figure as it is the one recommended by the Organisation of Economic Cooperation and Development. 

Tim Reay, principal at Hewitt international benefits team, said cultural factors, such as southern Europeans having to finance their sons and daughters for longer, suggested a suitable replacement percentage was not 70% everywhere.

“I'd contend it should be more the further south you go,” he said.