Less than two-fifths (38 per cent) of Millennial and Gen Z households are on track for an adequate retirement income, according to the latest update from Hargreaves Lansdown's Savings and Resilience Barometer.

The update showed that pension gaps continued to "loom large", with Hargreaves Lansdown head of retirement analysis, Helen Morrissey, pointing out that older generations don’t fare too much better, as less than half (45 per cent) of Generation X and half of Baby Boomer households are able to say the same.

The picture improved, however, when considering additional assets such as individual savings accounts (ISA) and other savings.

Indeed, when taking broader savings into account, 47 per cent of Millennial and Gen Z households were on track compared to 53 per cent of Gen X and 58 per cent of Baby Boomers.

For those closest to retirement, resilience "surged" to 58 per cent of households being on track for an adequate retirement income.

However, Morrissey stressed that there is "still much to be done to improve our retirement resilience", suggesting that increased contributions could be one key solution.

"It’s never too late to make a difference," she continued. "A 50-year-old earning £35,000 per year and contributing at auto-enrolment minimums to a pot currently worth £80,000 would be on track for a pension pot of £195,000 at age 67.

"Bumping the employee contribution from 5 per cent to 7 per cent would see that rise to £211,000. If you were to boost your contribution to 6 per cent and have your employer match it, then you could see your pension pot grow to £227,000."

The comments come amid renewed focus on adequacy issues, with the revived UK Pensions Commission tasked with looking into why tomorrow’s pensioners are on track to be poorer than today’s, and what is required to build a future-proof pensions system that is strong, fair, and sustainable.

Rather than Pensions UK's Retirement Living Standards as a means of measuring pension adequacy, Hargreaves Lansdown's barometer uses target replacement rates with a Living Wage Pension underpin.

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