A fifth of those aged 55 to 64 have nothing saved for retirement, research from Aviva reveals.
Those who are saving are managing to put aside just £33 per month on average, down from £39 last year, and some 40% are not currently putting anything away for their retirement.
Aviva's survey of pre-retirees has discovered that the average pension pot has fallen substantially in the past year as well, with the typical amount saved now worth just £9,652, down more than 22% from £12,351 in 2012.
Instead of saving, many individuals are still reliant on unsecured borrowing on credit cards or personal loans. While Aviva says there has been a small decline in this type of borrowing in the past two years - down 5% since September 2011 - the average amount a pre-retiree owes is still more than £21,000.
Indeed, figures from the Debt Advisory Service highlight that many adults across the UK are reliant on borrowing money to get by each month, so are in no position to think about pension saving. Its research shows that 1.5 million adults used credit to pay their mortgage or rent in July, while 2.5 million borrowed money to pay a utility bill.
"As everyday living costs continue to rise it is vital that you make sufficient financial preparations for the future," says Clive Bolton, managing director of Aviva's at retirement business.
However, as Ian Williams, director of communications at the Debt Advisory Service, points out: "The steep increase in the number of payday lenders in the past couple of years has made it increasingly easy to borrow when you run out of money.'
In part the decline is likely to reflect rising living costs. With the average monthly outgoings of over-55s now topping £1,308, while the average income is down by 2%, Bolton says it is "alarming" to see a drop in the amount people are saving.
"Putting away even a small amount each month can make a real difference if you start early enough. Additionally, keeping your debt levels in check can reduce the need for corrective action further down the line, which is especially important when income pressures are leaving people with less room to breathe," he adds.
This article was written for our sister website Money Observer