Younger workers to retire with company pensions worth just a third of those paid to their parents Today's 60-year olds can expect to retire on an income of just over £21,070 a year, if they have been members of a "gold-plated" earnings related scheme. Even those who have contributed to a "defined contribution" scheme, where pensions are based on stock market returns, are retiring on an average annual income of £13,330. These are now the default pensions for those in the private sector. In contrast, a 20-year old starting work today, making the same contributions can expect a company pension of £6,440 a year, according to actuaries Barnett Waddingham. working an extra five years would just boost this pension by £4,000 a year. Malcolm McLean a consultant at Barnett Waddingham said younger workers look set to be hit by a double-whammy of falling annuity rates, caused by increased longevity, and lower investment returns. At the same time companies are paying less into staff pensions. He added: "These figures show the stark reality of the pension divide between past and future generations ... The pensions enjoyed by substantial numbers of former workers in the private sector will clearly be well beyond the reach of many in the years ahead. This survey comes as the Government launches a new campaign to get people saving for retirement. Over the next few years workers will be automatically enrolled into a pension scheme, and contributions deducted from their salaries - unless the chose to specifically opt-out. Mr McLean said this scheme would be "too little too late" for many workers. He said the Government had taken too long to roll out this scheme, and it remained to be seen whether workers would contribute sufficient sums to give them a decent level of pension in retirement. It remains my view that the Government should develop a Plan B for implementation at the earliest possible stage should auto-enrolment fail to deliver the desired results. In the meantime there should be no resting on laurels. What has happened to our once great and much valued private pension system is a sorry tale but we owe it to succeeding generations to do what we can to at least partially restore the situation before it is too late. Ros Altmann, the director general of Saga said more could be done to encourage pension saving. But added there needed to be reform of the state pension to ensure those on low pay benefit from these new pension arrangements and aren't simply forgoing means-tested benefits.