Renters are three times more likely than homeowners to fail to reach a minimum standard of living in retirement, research from Broadstone has revealed, prompting calls for the government to consider mandating higher pension contributions as an "urgent priority".

The research found that a quarter (25 per cent) of renters are unlikely to achieve even the Pensions and Lifetime Savings Association’s (PLSA) definition of a minimum income standard of £12,800 per annum, compared to 8 per cent of homeowners.

The gap was “even wider” when looking to reach a moderate retirement income standard of £23,300, with 71 per cent of renters unlikely to reach this level compared to 45 per cent of homeowners.

However, homeownership was not the only key factor, as the research also found that single people are more than twice as likely to not achieve a minimum retirement living standard than couples, with 19 per cent unlikely to achieve the PLSA’s minimum standard, compared to 8 per cent of couples.

In addition to this, the survey found that 14 per cent of those set to reach state pension age in this decade are unlikely to meet the minimum income standard, representing a higher proportion than any other cohort.

Broadstone highlighted the research as demonstration of the "pressing need" for support for people set to enter retirement with inadequate savings, as well as the need for firm intervention to help deliver better outcomes for the tens of millions of people set to reach later-life beyond 2030.

In particular, Broadstone head of defined contribution (DC) workplace savings, Damon Hopkins, argued that while proposals to extend auto-enrolment rules by reducing the minimum age to 18 and removing the lower earnings limit are "small steps in the right direction", mandating higher pension contributions "has to be an urgent priority".

In addition to this, he suggested that better governance is needed around investment strategies to ensure that the hard-earned money people are putting into pensions is performing for their later-life.

He continued: "Other initiatives like improving financial education (in all aspects of society i.e. school, work, social media etc) will further help people recognise the importance of accumulating adequate later-life savings.

“Despite the vast increase to pension scheme membership which is now nigh-on ubiquitous among employed workers in the UK, more needs to be done to ensure many groups are saving sufficiently ahead of retirement.

“The gap between homeowners and renters is a stark reminder of the wider financial benefits that homeownership can bring, as well as the difficulties that those struggling to get on the housing ladder face.

“The cultural and financial importance placed on property ownership has not only boosted prices further but meant that for many people other financial goals are compromised. It clearly points to the improvements needed in the auto-enrolment system which go beyond the homeowner versus renter dichotomy."

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