A 25-year-old today will need more than £3 million in their pension pot to have a “comfortable” retirement, new analysis suggests.

A comfortable standard of living as defined by the industry body Pensions UK would include one holiday abroad a year, some weekends away in the UK and weekly meals out.

Even for a “moderate” lifestyle, including one foreign holiday a year and a weekly takeaway, a Gen Z pensioner would need a pot of £2.2 million. The “minimum” standard of living — where basic needs are covered and there is some left over for a UK holiday once a year and eating out once a month — would require a pot of £947,000.

The analysis by the wealth manager Rathbones was based on Pensions UK’s assumptions about how much money a retired person today would need to achieve the different lifestyles. It says that for a comfortable retirement in 2025 you need £43,900 annual post-tax income, for a moderate lifestyle you need £31,700, and for a minimum £12,400.

Rathbones worked out its predictions for a 25-year-old retiring at 65 assuming that inflation will average out at 2 per cent a year for 65 years — 40 years up to retirement at 65, then 25 years in retirement. Its analysis does not include state pension entitlements, and does not take into account housing or care costs.

It suggests that to reach this comfortable retirement pot, a 25-year-old would need to be putting into their pension £1,600 a month (from their salary and their employer’s contributions). If their employer paid the minimum 3 per cent, they would have to pay in £1,000 a month. This is assuming that contributions will rise 2 per cent a year through pay rises, and that the pot will grow 5 per cent each year.

• Why Gen Z is facing a pensions crisis

“The suggestion that a single Gen Z person will need from about £1 million for a basic standard of living in retirement to as much as £3 million for a comfortable retirement highlights just how daunting the savings challenge looks for today’s young workers,” said Lisa Picardo from the pensions consolidation firm PensionBee.

“Faced with expensive student debt, soaring housing costs, and rising living expenses, it’s no surprise that many feel the goal is out of reach.”

Previous surveys by the Skipton Building Society indicated that 34 per cent of Gen Z and millennials said they couldn’t think about retirement because of too many other financial priorities, with 25 per cent saying they didn’t earn enough now to save for later life.

But Picardo said young savers should not be disheartened, because time was still on their side. “Even small, regular contributions made early in their careers can benefit hugely from compound growth that works its magic over the decades,” she said.

“Starting early saving into a workplace pension or a personal pension, and topping up in a tax-efficient way when possible, is a powerful way to make a real difference.”