Savers have been warned that they are "significantly understimating" how much they will need in their pension pot in order to enjoy a "comfortable" retirement. Saltus Wealth Index surveyed 2,000 UK adults with more than £250,000 in assets, asking how much they believe they will need to save, which, according to the Pension and Lifetime Savings Association (PLSA), needs to be enough to provide an income of £43,900 per year.

One in five said they would need an individual pension pot of between £401,000 and £600,000 to retire comfortably, while 13% believe they would only need between £201,000 and £400,000. On average, respondents believed a pot of £663,308 would be sufficient. However, Saltus' Pension Calculator suggests that, when considering inflation, a pot of at least £1.5million is needed in most cases, which increases to £2.5million for younger respondents, according to experts.

The difference between what high net worth individuals (HNWI) actually have in their pensions pots and what they need is said to be even bigger, with shortfalls of between £250,000 and £950,000 depending on their age.

Even when the state pension is taken into account, specialists advise, many of those aged 54 and over will "still fall short".

The average pension pot amongst respondents to the survey was £520,052, while annual contributions are around £30,000.

This means that, based on a "cautious" 4% annual investment return, most HNWIs will fall "significantly short" if they want to retire at 67 on an income of £44,000 per year in today's terms, Saltus said.

Mike Stimpson, Partner at Saltus, said: "We're seeing a clear disconnect between expectation and reality in retirement planning. Many high earners assume they're on track, but the findings suggest otherwise. It's concerning that most people are falling short of their retirement goals, especially as pension pots are increasingly used to support family or cover rising living costs.

"Planning is further complicated by Inheritance Tax changes from April 2027, when unused pensions and certain death benefits will count towards an estate. This could make pensions less attractive as a wealth transfer tool, particularly for high net worth individuals who rely on them to pass on wealth.

"Still, the £60,000 annual pension allowance remains a powerful way to build wealth tax-efficiently, but with demands on savings coming from many directions, planning is more important than ever. That's why we created the Saltus Pension Calculator to help people make better informed decisions about their financial future."

It comes as frozen income tax bands mean pensioners are being hit, Laura Suter, director of personal finance at AJ Bell, said.

She added: "The frozen tax bands combined with chunky increases in the state pension mean that more pensioners are becoming taxpayers."