Britain is heading for a chronic retirement under-saving crisis with more than two-fifths, 43%, of working-age Britons under-saving for retirement, according to DWP figures.

The pensions under-saving equates to 14.6m people, with more than 3m self-employed people failing to save into pensions, according to the figures.

Platform and SIPP provider AJ Bell said that the data means that fewer than one in four are on course to hit trade body Pensions UK’s ‘comfortable’ retirement income level, while more than one in 10 will not reach the ‘minimum’ income level.

Tom Selby, director of public policy at AJ Bell, said: “There’s no escaping the fact that a chronic retirement under-saving crisis looms over the UK pensions system in its current form and the latest government stats make for suitably grim reading.”

He pointed out that people set to retire in 2050 were on course for 8% less private pension income than those retiring today, “even when you factor in that they will have likely been automatically enrolled into a pension for a significant chunk of their working lives compared to their counterparts retiring today.”

He said much of the problem is down to the dwindling number of DB schemes outside of the public sector. But he said there are also more worrying trends that emerge from the latest figures.

Mr Selby said: “Just one-in-four low earners in the private sector is saving into a pension, and when you introduce Pensions UK’s retirement living standards, almost half of lower earners are expected to struggle to afford some of their basic needs in retirement.

“If there’s anything mildly reassuring about the figures, most people are at least set to achieve the Pensions UK ‘minimum’ retirement living standard. Although the 13% of people expected to not even reach that level – meaning they could struggle to meet basic living costs in retirement – are a major worry.”

He said the figures also show the self-employed faced a daunting climb towards a decent standard of living in retirement, with more than 3m self-employed workers not saving into any kind of pension.

Mr Selby said: “While many self-employed workers will have money tied up in business, property or other savings and investments, the last 25 years have seen pension engagement among the self-employed plummet – 60% of those earning £10,000 per year or more were contributing to a pension in 1998, compared with just 20% today.

“In essence, all signs are pointing to a nation that will be ill equipped to retire in any way comfortably by the middle of this century, if not sooner."

He said more needs to be done to ensure pension savers, particularly lower earners and the self-employed, can retire with a decent standard of living, rather than scraping by on the State Pension alone.