One in eight retirees, equating to over one million people, will be renting their homes in 15 years’ time – treble the current number.

The prediction, calculated for Scottish Widows as part of its Retirement Report, reveals that 42% of the average retirement income will be spent on rent.

As such, the average renter planning to retire in 2032 will need to save an additional £525 every month into their pension – £6,300 a year, or they will need to work an extra five years to cover the growing costs.

However, Scottish Widows found that 67% of 50-64-year-olds planning to rent in retirement have no plan to increase their pension contributions to cover the shortfall and 68% said they can’t afford to up their contributions without a pay rise or compromising elsewhere.

For those expecting to retire between 2018 and 2022: an extra £3.2bn of savings is needed in total.

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While the picture is bleak across the UK, London and the South East will be hit harder due to surging prices and demand. In comparison, the North and Wales will remain the most affordable which is why 39% of people planning to rent in retirement would relocate (65% in London).

For renters under the age of 45, Scottish Widows said the issue may be a ticking time bomb with this group already struggling to get onto the property ladder. Of those who do manage to buy, 15% anticipate they will still be paying off their mortgage well into retirement, rising to 26% of 25-34 year olds.

Robert Cochran, retirement expert at Scottish Widows, said: “Generation rent is a term often applied to younger generations, but our research shows the problem extends right to the other end of the generational scale. The number of people renting in retirement is set to treble over the next fifteen years, but alarmingly few people are thinking about how they would cover the growing cost of a property lease when they stop working.

“While some people may choose to rent later in life, we also need to ensure it’s a more sustainable, secure option for an ageing population – many of whom will have no choice. We’re therefore urging the government to consider ways to refine the housing market to better suit older renters – through options such as open-ended tenancy, with predictable rents and protection.”