SCOTS are facing a pensions timebomb with few people saving enough for a comfortable retirement.

New research has found that the average working age person faces a £435,000 shortfall in their pension pot if they want to retirement to meet their expectations.

The first ever Brewin Dolphin Family Wealth Report found that the average person considers an income of £26,000 to be adequate to meet their needs after leaving work.

However, at today's prices this would require an 18 year-old in Scotland to save £372 a month, a 30 year-old would need to save £674, while a 44 year-old would need to put aside a hefty £1,563.

The report said that the outgoing 'Baby Boomer' generation is likely to be the last to enjoy a comfortable retirement unless the picture changes.

It has called on older people to consider helping their younger relatives financially instead of simply passing on wealth in their wills, and said that the government should create tax breaks for people passing money to their grandchildren.

Liz Alley, Divisional Director of Financial Planning at Brewin Dolphin, comments: “The harsh reality that this country faces, is that the outgoing ‘Baby Boomer’ generation will be the last to enjoy a comfortable retirement unless urgent action is taken now.

"We are calling for older people to fundamentally rethink how and when they pass on their wealth to younger relatives. The solutions we are proposing today are based on earlier and regular gifting as part of a strategic financial plan, rather than focusing on a one-off inheritance.

"This could help set grandchildren up for life as well as reduce inheritance tax.”

Wealth manager Brewin Dolphin drew on the responses of more than 10,000 people for the report, which provided a detailed analysis of the pensions and savings gap faced by most people.

It found that the average pension pot of someone aged 18-44 is £180,000, well short of the £616,000 needed to provide the retirement income they expect, which was said to be £18,000 from a private pension and £8,000 from the state pension per year.

According to the survey, a quarter of Scots have no savings at all, while 15 per cent save less than 5 per cent of their net income.

A lack of financial planning is not restricted to those on lower incomes, with one in five people living in households with an income between £60,000 - 100,000 said to have saved less than 1 per cent of their net income.

Brewin Dolphin have a number of recommendations which could improve the prospect of a good retirement for todays workers, but most require the Baby Boomers' help.

The firms says a 'Saving for Grandchildren' tax incentive could be introduced, a gift of 10 per cent from a grandparent’s estate cuts their inheritance tax rate, similar to the current charitable giving scheme

It also calls for gifts to a grandchild’s junior ISA and pension to be free from inheritance tax, and tax relief on a grandparent’s contribution to university tuition fees.

Liz Alley adds: “Our findings show that whilst we may be a challenged nation when it comes to savings, we are also a generous one when it comes to passing on wealth.

"However, often this wealth is being transferred in an inefficient way. Only a small percentage of people have thought beyond one-off gifting with their inheritance planning. A huge difference could be made by making regular contributions to a grandchild now via a JISA or pension.

“The potential long term investment growth, the effect of compounding and the IHT savings from this approach means that one silver pound gifted and invested today, could be worth three times as much to grandchildren later on.”