The UK has the largest pensions gap per person in the whole of Europe and UK adults now need to save an average of £10,300 every year to catch up, according to research published today. Europe's annual pensions gap now stands at £1.6 trillion.

The study by Aviva, in conjunction with accountants Deloitte, looks at the annual savings shortfall across a number of European countries, placing the UK at the top of the table with a total annual pensions shortfall of £318bn. Germany is in second place with a shortfall of £392.7bn or £9,700 per person, followed by the Republic of Ireland (£16.9bn or £7,600 per person), France (£204bn, £6,600 per person), Spain (£142.9bn, £5,900) and Russia (£336.8bn, £4,900).
The UK savings shortfall of £10,300 a year is an average based on the 31 million UK adults who are due to retire between 2011 and 2051.
Aviva warns that the problem is more acute for older people who have less time to top up their savings, especially if they intend to retire at age 65. It could also particularly affect those on lower incomes, for whom setting aside money may be more difficult.
Toby Strauss, chief executive of Aviva UK Life, called the findings a wake-up call for individuals and governments across Europe, and said effective partnerships between the government and the private sector are crucial to solving the problem. ""The findings are startling. We know from our research that many people in the UK are planning to work later into life, but this will not solve the issue fully.
James Walsh, senior policy adviser at the National Association of Pension Funds, said: ""The UK is facing a pensions crisis and the earlier people start saving for their retirement, the better. Under-saving is a live and growing issue that will impact on more and more people as the UK ages. We don't think that extra European legislation will help alleviate the problem. The UK already has a well-regulated pensions infrastructure. The main thing is to get people saving more.""
Tom McPhail, head of pensions research at Hargreaves Lansdown, agreed: ""The retirement crisis is an individual problem that we all have to take personal responsibility for. The state and employers can provide some help but the income each of us will enjoy in our retirement will depend on how much we choose to save now.""
George Ladds, head of investment and pension research at Fair Investment Company, said trust in the pensions industry was sorely lacking. Ladds suggests the introduction of an Isa-style pension, where clients can access personal savings before retirement but with ring-fenced tax relief and employer contributions until retirement.
He would also like to see maximum tax relief on all contributions to £30,000 but along with basic rate tax relief to encourage older people to keep saving into their pension; and incentives for under-30s, such as 40% tax relief for contributions under £500 per month, taken at source. ""If younger people could see that for every £60 they saved they would get £100 back, it might actually encourage them to save into a pension.""
Analysis published by MetLife today shows that stakeholder pensions have produced annual returns of 4.38% since their launch in 2001, with £10,800 in contributions now worth around £13,994 – a ""qualified success"" according to spokesman Dominic Grinstead. Total contributions have topped £20.75bn with around 1.86 million people members of stakeholder schemes which were originally launched to encourage long-term saving for retirement