That's according to new research from the Pensions Policy Institute (PPI), sponsored by Capita, shared exclusively with Express.co.uk. The research has laid bare the impact of the coronavirus pandemic on people's ability to save for retirement.
It found young people and those from a Black, Asian and Ethnic Minority (BAME) background hardest hit.
The Future Life Report explores how changes in the working and retirement landscape may affect the wellbeing of future pensioners.
According to the research, 20 million adults in the UK (38 percent of the adult population) saw their financial situation worsen as a result of the pandemic.
It led to one in ten adults reducing pension contributions, with six percent stopping payments altogether.
The impact of unemployment has fallen heaviest on young workers.
One in five (20 percent) of 18-24-years-old working in February 2020 found themselves out of work by January 2021.
This is compared with seven percent of workers of all ages.
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Amid growing financial pressures, more than half (57 percent) of people in the 18 to 24 age group used some form of debt between March and September 2020, compared to just 20 percent of people aged 55 and over.
In July 2020, 20 percent of those aged 18-34 were behind on their bills, compared to eight percent of those aged 35 and over.
In 2019 there were 288 people over state pension age for every 1,000 people of working age, but this is projected to swell to 361 for every 1,000 by 2050.
Daniela Silcock, Head of Policy Research at the Pensions Policy Institute, said: “It is hugely concerning to see the disproportionate impact that the pandemic has had.
"With the growth of the gig economy and the more transient nature of careers, there is a risk that people will become even more disengaged from their retirement savings pot.
"Given the complexity of decisions, particularly since the introduction of the pension freedoms, many people will find it difficult to make choices that will best meet their health and care needs over the course of later life.”
The report concludes that retirement prospect for young savers today are very different than for previous generations, but that the pensions industry hasn’t changed "suitably" to prepare people for retirement.
Stuart Heatley, Managing Director of Capita Pensions, added: “COVID-19 has clearly exacerbated issues around gender and racial social disparities and periods of unemployment, but frankly these trends have been around for some time now.
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"The simple fact is that saving for the future will always seem pointless if it means today is a struggle.
“Advice plays an important role in supporting people while making critical choices about their futures, but most of this guidance currently focuses on at-age retirement decisions rather than supporting ongoing discussions throughout an individual’s career.
"It is clear that the current pension system is outdated and no longer reflects the needs of society.”
So, how can the situation be reversed?
"Pensions are still primarily designed on the basis that someone will be employed full time, on a regular salary, with no concurrent employment," Mr Heatley commented.
"But what we have seen and will continue to see is changes to employment, which might include periods of unemployment, contingent labour, zero-hours contracts, the rise of the Gig Economy and so on.
"These are leading to less financial consistency and therefore understanding and desire to make a long-term savings commitment.
"Uncertainty by its nature makes us focus initially on the short term - and pensions are not a short-term consideration.
"Despite the collective efforts of many stakeholders, the key fact remains that messaging around pensions breeds complexity and confusion over relevance and ownership to this day.
"We need less provider-to-market focus and instead develop a group of like-minded pensions, communications and engagement professionals to work together to solve a problem that has been exacerbated by COVID-19, but has been around for many, many years.
"To achieve this, we need simplicity, transparency and trust as key steps to enable individuals to see pensions as a relevant part of today’s budgeting and financial planning."
But what about those who have been impacted by the coronavirus pandemic? How can they turn their current situation around ahead of retirement?
"Whilst most people recognise the need to provide income in later life, for many people of different ages and generations, there is a question of whether this is relevant when they are younger, particularly when measured against other priorities like housing, holidays and actually, just getting by month to month," Mr Heatley said.
"There is also a lack of understanding perhaps in what pensions are, how they work and also whether they will ever achieve retirement or whether the term retirement can truly be ‘retired’, allowing us to instead re-wire our income sources through later life.
"I would therefore call upon people to be far more inquisitive about their pension pots – or how they view saving for later life. But the onus really is on the pensions industry as a whole to lead the change."
Daniela Silcock, Head of Policy Research at the Pension Policy Institute (PPI), added: "These changes could take many forms, for example, products which encourage higher pension contributions when in full time employment to compensate for times in casual, part-time or self employment, policies requiring higher contributions from employers and/or for employers to pay total contributions on behalf of those with low incomes, and/or family pension savings vehicles which could ensure that people taking time out to care are still having contributions made on their behalf by family members in employment."
Support may be available, as Ms Silcock highlighted.
"There are free guidance services in place to help those both of working age and in retirement to manage their finances, for example, the Money and Pensions Service and Pension Wise and the pensions dashboards (currently under development) which will allow people to view all of their pension savings and entitlement in one place," she said.
"If industry and policy makers continue to work together, with a holistic understanding of the needs and characteristics of today’s workers, a savings system can be developed which improves the chances for younger workers to achieve adequacy in retirement."
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