The Brexit vote is having “terrifying” effects on the pension schemes of millions of British workers, with 75% of people now expected to have a retirement income below the government’s recommended level, City experts warn.

Leading pensions consultants Hymans Robertson say the combination of interest rates and weaker projections for growth post-Brexit mean people will have to save far more towards their pensions to receive the level of income they were on course for before Britain voted to leave the EU.

A survey by the firm of 600,000 employees, factoring in new economic assumptions post-Brexit, shows that only 25% now have a good chance of meeting the level of retirement income regarded as appropriate by the Department for Work and Pensions (DWP), and that 50% have an extremely low chance of reaching that level.

Chris Noon, head of workplace savings at Hymans, said: “It is terrifying that such a large proportion of the population which is due to retire in the next 20 to 30 years will be receiving an income below the level regarded as adequate by the government.

“But we are in a post-Brexit world of low yields in which risk-free assets are generating little or no returns. This makes the cost of providing pensions more expensive.

“Evidence of this can be seen in the fact that the cost of purchasing an annuity [which provides a guaranteed income for life] is up by as much as 30% since Brexit.”

Since the EU referendum on 23 June, experts have focused mostly on what they believe will be Brexit’s effect in killing off remaining final salary pension schemes, which guarantee a proportion of an employee’s final salary as a pension. The deficits of final salary schemes soared by tens of billions of pounds as a result of the vote.

Hymans and other City firms now say the far larger numbers of workers in defined contribution schemes must face the grim post-Brexit choice of either having to pay far more into their pensions, or accepting lower income in retirement, or working for longer.

Noon added: “Together the changes to the economic outlook mean the average employee may need to save 2% to 3% a year more over their lifetime to deliver the same level of pre-Brexit income [at the same retirement date].”

Calculations used by the DWP advise that someone on an average salary of £30,000 would need a pension of £20,000 to maintain their standard of living, having taken into account their reduced costs in retirement. Someone who retired on a salary of £70,000 would need around £35,000 a year.

Richard Farr, managing director at Lincoln Pensions, which advises pensions trustees, said: “It means people will no longer be working into their 60s but into their 80s before they have a pension they can retire on. Brexit may be liberating in the long run, but in the short term it will be carnage.”

The collapse in interest income and people living longer has wrecked the finances of Britain’s final-salary pension schemes since the financial crash in 2008, and rising life expectancy and a decline in investment returns from 2000 onwards have created huge funding shortfalls.

Jon Hatchett, head of corporate consulting at Hymans, said: “Post-Brexit and with the Bank of England’s policy response to economic uncertainty, the cost of providing a defined benefit scheme has risen to 50% of pay. This is clearly unsustainable for the majority of employers. Unsurprisingly, we’re likely to see the last remaining open private-sector schemes close.”

Unlike on the continent, Britain has relied on private pensions to top up state pensions to provide workers with an adequate retirement income. If, as many expect, the UK’s GDP turns out to be substantially lower than it was predicted pre-Brexit, then previous projections for the new state pension will prove to be overly generous.