Policymakers should take action to "safeguard" the future of retirement in Britain, Quilter has said, backing plans to move forward with a system of targeted financial support and calling for a consultation on the most appropriate state pension uprating.

The call for action was made after Quilter's Retirement Lifestyle Report painted a "nuanced but urgent picture of retirement in the UK today", revealing that just over half (51 per cent) of retirees are concerned about their ability to maintain their current standard of living over the next 12 months.

According to Quilter’s Retirement Lifestyle Report, retirees spend an average of £22,140 a year, which is almost £10,000 below the recommended level for an adequate retirement.

However, there were significant income disparities, as the three lower-income personas in the research enjoyed an annual income that was a "fraction" of their higher-income counterparts.

"Early-age scrimpers", for instance, had an annual income of £25,449, compared with £85,171 for "early-age spenders".

The research also revealed that retirees continue to rely heavily on the state pension, making up 50 per cent of household income for those aged between 80-84 and 47 per cent for those aged 70-74.

Gender was also a factor in this, as women were particularly reliant on the state pension, due to gender gaps in income, pensions, and savings, compounded by higher life expectancy.

On average, the state pension made up 27 per cent of household income for men and 32 per cent for women, rising to 44 per cent for widows, which was 10 percentage points higher than for widowers.

The research also found that the biggest driver of household income growth was an increase in the state pension, with 45 per cent of retirees reporting a rise over the past year due to this.

However, advised retirees relied far less on the state pension, as on average, it comprises only 20 per cent of their overall household income, compared to 29 per cent for retirees overall.

"Our research shows just how valuable the state pension is for retirees, particularly so for those on lower incomes, with their reliance growing as they age," Quilter head of retirement policy, Jon Greer, said.

"It is essential that this lifeline remains secure, particularly as the decline in gold-plated defined benefit pensions means future retirees face greater financial uncertainty."

But Greer admitted that, "given the rapidly increasing financial burden the state pension is placing on the government’s coffers, reform may be necessary to place it on a more sustainable footing".

In line with this, Quilter said that the government should consult on the most appropriate state pension uprating and encourage UK political parties to agree on a benchmark for the state pension, set relative to mean full-time earnings, and commit to a sustainable uprating mechanism.

There has been growing speculation about whether rising costs could finally trigger changes to the state pension triple lock, with the International Monetary Fund (IMF) recently warning that the government will need to make "difficult decisions" to rebuild fiscal buffers given the UK's ageing population.

The state pension was not the only area of concern, as Quilter CEO, Steven Levin, also stressed that "too few are taking financial advice", with the report showing a clear preference for advice among younger and higher-income retirees.

Take-up of advice was strongest among retirees aged under 65, fully retired and earning above the £35,000 median income, with 78 per cent reporting they are currently being advised and a further 16 per cent having received it in the past.

More than half (57 per cent) of retirees aged 65-79 with a personal income exceeding £35,000 report receiving financial advice, while for retirees over the age of 80 with a personal income exceeding £35,000, this drops to just below a third (32 per cent).

While this is a significant drop, Quilter said it still represents take-up that is proportionately double that of low-income retirees of the same age.

The research also found that financial advice has played a significant role in whether or not retirees have seen their income rise or fall, pointing out that almost two-thirds (61 per cent) of those currently taking advice saw an increase in their household income over the year, close to double the proportion in the general retirement population.

However, the firm recognised that it is not realistic to expect everyone retiring, or in retirement, to receive financial advice, however beneficial, due to financial and other barriers.

Given this, it backed the Financial Conduct Authority’s proposals for a targeted support regime, arguing that this should help people to make informed decisions around spending, saving, investing and allocating their capital.

It also suggested that, having been introduced to the world of financial planning via targeted support, we think that many may then opt for full financial advice thereafter, bringing additional long-term financial benefits to those individuals.

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