Twentysomethings entering the workforce now need to save 18 per cent of their earnings into a pension to enjoy a comfortable retirement, a new report has found.

The estimate is based on achieving an 'adequate' retirement income - 70 per cent of your average earnings over the course of your working life.

But young Britons should aim to put away 20 per cent of their salary if they want the same kind of retirement as today's pensioners, according to think tank the International Longevity Centre – UK.

Financial challenge: Today's twentysomethings are told to put 18% of salary into a pension - while paying off student loans and saving for milestone goals like weddings and first homes

People retiring today are doing so on incomes worth 76 per cent of their average earnings, because many still get generous and guaranteed final salary pensions not available to most younger workers.

But today's twentysomethings face new financial challenges, such as the heavy cost of getting on the housing ladder and repaying student loans, which will probably put the 18 per cent saving target out of reach for many.

Meanwhile, 18 per cent far outstrips the 2 per cent of salary people in the UK are currently saving under auto enrolment, when individual, employer and Government contributions are put together.

It is also way above the increased auto enrolment savings level of 8 per cent of salary scheduled by spring 2019 - suggesting even those who stay opted in could face a cash-strapped retirement.

Young Britons have extra impetus to save, because the state pension on its own was bottom of the league when its generosity was tested against similar systems in 30 other economically-advanced countries.

However, the UK did much better in achieving 'adequate' levels of income when voluntary savings - work and personal pensions - were taken into account by the ILC-UK study, which was sponsored by Prudential.

See the tables below to find out the UK's standing against the US, France, Germany and other countries when it comes to pension adequacy.

UK retirement income from state pension only is bottom of the adequacy league...

... But UK comes much higher up the adequacy league when private pension savings are included

Source: OECD and ILC-UK

The UK was also middle-ranked for intergenerational fairness, and its pension system was deemed affordable in terms of how much the Government spends in this area - 5-6 per cent of GDP, less than in many other developed countries.

The ILC-UK report found that only 12.4 per cent of people in the UK are saving more than 15 per cent of earnings towards retirement at present. It also discovered more than 30 per cent of people aged 25-44 are not saving at all.

Meanwhile, only 9 per cent had a specific savings target for retirement, compared to 29 per cent in the US, 33 per cent in Singapore and 69 per cent in Hong Kong.

When ILC-UK surveyed the UK workforce, it found that only about 20 per cent of people said they saved into a private pension, but it assumed that many don't realise they are doing so because auto-enrolment is based on inertia.

Although the think tank set a tough savings target of 18 per cent of salary for young Britons, it acknowledged the challenges they face in putting away enough for old age.

'Low investment returns and interest rates, sluggish economic and wage growth and the gradual decline of defined benefit [generous and guaranteed final salary] schemes means those entering the workforce today will face a hostile economic environment in which to build their pension pots,' it said.

The ILC-UK suggested a number of ways to help close the pension savings gap.

* Take auto-enrolment a step further and introduce 'auto-escalation' - increase contribution levels when people get a pay rise unless they opt out, for example from 3 per cent to 4 per cent of salary to account for their rising wealth.

* Expand auto enrolment to help self-employed, part-time and zero-hour contract workers save for retirement.

* Support people unable to save during working life, potentially via enhanced benefits for low income retirees.

* Equip people to make better financial decisions through financial education plus accessible and trusted financial advice and guidance.