Over one in five (22 per cent) 18-34 year olds expect to need £100,000+ a year for a good standard of living in retirement, while only 3 per cent of those aged 50-69 expect the same, research from Royal London has found, highlighting a generational divide in retirement expectations.

Its report, Workplace Pensions - How much is enough?, which surveyed 4,000 UK employees with a pension, found that 13 per cent of people in the UK believe they need over £100,000 annually for a decent retirement, while 6 per cent think they need at least £200,000.

When respondents were asked to give a figure of what they expected to need in retirement, among those aged 18-34, on average, men anticipated needing approximately £81,300 annually, while women thought they would need around £69,000.

Royal London said that this disparity continues across age groups, with mid-life men (aged 35-49) expecting on average to require £64,000 per annum at retirement, versus £49,400 for women, and men approaching retirement (aged 50-69) expecting on average to need £38,900 compared to £31,800 for women of the same age group.

The firm pointed out that this £100,000 figure is “significantly” higher than the £43,900 Pensions UK’s Retirement Living Standards estimates that a comfortable standard of living will cost a person living alone.

However, Pensions UK's figure doesn’t include housing costs and assumes that tax has been paid on income.

Four in 10 (39 per cent) employees said they definitely or probably think they will have rent or mortgage costs in retirement, a figure that rises to 46 per cent of those aged 18-34, which Royal London said could make retirement “significantly” more expensive and mean that retiring with a good standard of living is impossible for some.

Given this, the firm suggested that for someone in their early 20s, who perhaps has 40 years or more to save for retirement, a target of £100,000 or higher may be a realistic annual income goal, particularly when factoring in housing costs.

Royal London pension and tax expert, Clare Moffat, said: “It’s clear that younger adults think they’ll need significantly higher income when they’ve finished work than those closer to retiring.

“This could be driven by their cost of living and inflation expectations, and also because young people face greater housing uncertainty than those before them.”  

Additionally, the research revealed concerns about having enough money to retire and the actions they can take to make changes.

Indeed, 26 per cent of people in the UK said they feel anxious about whether they will have enough money to retire after checking their pension balance, while 5 per cent feel that it is either too late or too early to make meaningful changes.

The research highlighted that few seek professional advice, despite these concerns, with 52 per cent of employees admitting they have never sought professional guidance or advice about their workplace pension.

Just over a quarter (27 per cent) of employees with a workplace pension said they have sought guidance or advice about their pension in the past 12 months, and 17 per cent have done so more than a year ago.

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