Scottish Widows is the sort of unassuming pensions company that rarely likes to publicly criticise government policy. But an analysis it published this week is a stark warning about the ticking time bomb that will explode in 10 to 20 years’ time. And it’s not pension incomes that are the worry - it’s the fact that so many of tomorrow’s pensioners who never got on to the property ladder in the 2000s and 2010s will have to find huge amounts of money to pay ever-escalating rents to private landlords.

Scottish Widows skirts around the issue by suggesting that non-homeowners currently in their 50s should start saving an extra £6,000 a year now to be able to afford their rent in retirement. As if people on low incomes are going to find that sort of money. The reason they are renting is that they were never able to find the savings for a deposit on a house in the first place, or didn’t earn enough to qualify for a mortgage.

The reality is that these people are likely to retire with little more than the state pension plus a small bit of private pension. Maybe they will be picking up about £200 a week once they are 67. Given that the average rent in England and Wales is £845 a month – and in London it’s about £1,250 a month – then the whole lot will be gobbled up by the landlord. So the taxpayer will have no alternative but to step in and pay most of the rent, and we are then on the hook for payments going on for maybe 20 or 30 years. All so that the buy-to-let landlord with multiple properties can enjoy a lavish retirement themselves.

This is the lunacy of promoting buy to let as a long term form of tenure for millions of people. Even in developed countries where renting is common, such as Germany, most people are living in a home they own by the time they reach retirement. Renting all the way through retirement, funded by the taxpayer, to a landlord who has the power to evict without reason and at short notice, is the worst possible situation. And it’s one we are hurtling towards.

Make no mistake about the dramatic change in the retirement landscape that is coming. Scottish Widows projects that one in eight retirees will be renting by 2032 – treble today’s figure. After that it will continue rising. It says there is a £43bn gap between the income and savings people have now and what the rent bill will be in retirement. That’s more than one-third of the entire NHS budget for a year – to be squandered on rent.

Dan Wilson Craw of campaign group Generation Rent says: “The common perception is that retirees either own their home outright or have a council tenancy, so the government will be in for a nasty shock as more of us retire and continue to rent from a private landlord. Many renters relying on pensions will qualify for housing benefit which will put greater strain on the public finances.”

Aviva, the UK’s biggest pensions company, also publishes figures on Saturday on the colossal financial issues facing non-homeowners currently in their 50s. While those who have bought their homes feel pinched - and expect to use the equity in their home to pay for a better retirement - the outlook for non-homeowners is so grim that 20% believe their only hope is having a lottery win. Most non-homeowning workers aged above 50 say they have no money left after basic costs to put aside extra money for a pension.

There was some good news on pensions this week: the Resolution Foundation said that auto-enrolment schemes will mean tomorrow’s pensioners will enjoy a roughly similar income (about £300 a week) to today’s pensioners. But they didn’t account for the large number that will now have to pay rent out of that money.

The solution? Build more houses, of course. But even 300,000 a year won’t solve this problem if they are snapped up by landlords. That only leaves us with rent control and much higher taxes on buy to let.

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p.collinson@theguardian.com