Only three in 10 (30%) high earners are on track for a comfortable retirement, Hargreaves Lansdown (HL) has found.

The firm’s savings and resilience barometer revealed that this compares to just 13% of households overall.

The research by HL found that when it comes to achieving a moderate retirement income, 69% of higher income households are on track to accomplish this, compared to 39% of households overall.

Head of retirement analysis at HL, Helen Morrissey, said: "There’s a shock in store for higher earners with the latest data from the HL Savings and Resilience Barometer showing only 30% of households are on track for a comfortable retirement income. If you’ve been used to having plenty of money during your working life, then you could face a nasty surprise if you enter retirement and find your pension cannot sustain the lifestyle you’ve become accustomed to.

"The problem is compounded when we look at the percentage of high earning households on track for moderate retirement income. Just under seven in ten are on track for this which may seem high, but the likelihood is that a moderate income will nowhere near meet their needs."

As a result of this finding, many higher income households may have to significantly reduce their expenditure in retirement from what they are used to in their working lives.

Moderate and comfortable retirements are taken from the Pension and Lifetime Savings Association (PLSA).

A moderate standard of living at retirement is measured at £23,300 for a single person and £34,000 for a couple, whilst a comfortable retirement costs £37,300 and £54,500 respectively.

Morrissey added: "The PLSA’s moderate retirement income is pegged at £23,300 per year for a single person and £34,000 for a couple. If you’ve been used to lavish holidays a couple of times a year, then the two weeks in Europe afforded under this standard just isn’t going to cut it and you are going to need to make some difficult decisions on your spending.

"This version of the barometer has shown the financial resilience gap between higher and lower earners continuing to widen. Higher earners have seen their overall resilience improve in stark contrast to lower paid households. If these households are in a position where they can save more, then boosting contributions into a pension should be an important consideration."

---