Pension pay-outs for British workers have fallen by more than three quarters over the past decade, a clear sign that the crisis facing today's workers when they reach retirement age is set to get worse.
The figures from consultancy Watson Wyatt show that someone retiring now with a personal pension could be more than 75 per cent worse off than someone paying the same contributions each month but retiring 10 years ago.
Ever lower returns are one of the key obstacles faced by employers when it comes to persuading workers to save for their retirement – and today's figures are unlikely to make that uphill struggle any easier.
Even when company's do offer a pension scheme, scepticism about future pay-outs and a resulting "spend now, save later" mentality often means take-up rates are low.
The Watson Wyatt survey suggests lower returns on investments mean that pension pots, calculated on the amount a worker would have accrued after saving for 20 years, are less than half the level they would have been ten years ago.
Even more worrying, annuity rates, the funds used to convert pension pots into income, have also fallen by nearly half over the same period.
Once these two cuts are combined, the resulting income is down by 78 per cent for a man and 76 per cent for a woman for savings of identical amounts.
What this means in practice is stark. A man who had contributed £200 a month for 20 years in an average with-profits pension policy would have received an annual annuity of £20,513 when retiring at age 60 in January 1997.
But a 60-year-old man retiring in January this year, having contributed the same amount over the past 20 years, would receive only £4,613 a year.
Similarly, a woman retiring at 60 in January 1997, having made the same contributions into a similar pension, would have received an annual annuity of £17,847.
But the same woman retiring in January this year would receive only £4,209 a year.
Stephen Yeo, senior consultant at Watson Wyatt, said: "The cost of pensions has risen due to lower investment returns, the increased cost of security and greater longevity."
The choice was grim but simple: either save for longer or work for longer, he added.
"Those who are lucky enough to have a defined benefit pension provided by their employer will not be directly affected, though these figures do shed light on why the cost of such pension arrangements has risen so sharply," he said.
"Annuity rates have actually risen over the last year and have fallen by only just over 5 per cent in the last three years combined, but fell steeply in the early part of the last decade," Yeo added.
"Pension pots are still getting smaller for the same amount of saving and this has cut the pension income for someone reaching retirement by 7 per cent compared with last year," he concluded.