Pension savers are struggling with so-called ‘retirement envy’ as they see the living standards and lifestyles of people who are already retired, says new research.

The study for MetLife among working over-45s shows 61% are jealous to some extent of the financial security enjoyed by older generations, including final salary schemes and better returns on investments while they were saving for retirement.

Just one in 10 of working over-45s expect to have a higher standard of living when they stop work while 29% expect to have a significantly lower standard of living and 29% believe they will be slightly worse off.

MetLife’s report: The Exposed Generation: Creating a More Certain Pathway to Retirement, sets out the challenge facing over-45s as they come to terms with the opportunities and challenges of new pension freedoms.

Government data shows there are some grounds for retirement envy, according to MetLife. Median retired household incomes at £21,100 are now £1,800 higher in real terms than at the depths of the recession in 2007/08 and have risen over the seven years while median income for working households is still below the 2007/08 level.

However the MetLife research shows that envy can cut both ways. Around one in five (20%) pensioners envy the pension freedoms and flexibility that younger generations will have.

MetLife warns that the pension industry needs to offer more innovative solutions to help savers make the most of increased flexibility on how they use pension savings.

Dominic Grinstead, managing director, MetLife UK, said: “Retirement envy is a real concern if savers simply switch off from pension saving and believe they will never achieve what older generations have.

“Financial education and advice can play a major role but the industry itself has to offer retirement income solutions which provide certainty over income and flexibility over capital as well as helping people to save.”

The research shows savers aged 45 to 54 are the most likely to be envious and the closer people get to retirement the envy drops. However 51% of those aged 55 to 64 suffer some retirement envy and 45% of working over-65s are envious.