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According to the Scottish Widows Pensions Report, 49 per cent of people are still not saving enough for their retirement and while this is a slight improvement on previous years, this is mainly due to consumers saving more for the short term.

Scottish Widows said that these savings are also largely being cancelled out by people subsequently withdrawing from these short term savings vehicles.

Despite this, 37 per cent of respondents admitting they are worried about having nothing in retirement (up from 34 per cent in 2007).

Ian Naismith, head of pensions market development at Scottish Widows, said: "While pensions savings are slowly starting to rise, there is still the real worry that in the current economic environment the nation is not doing enough to prepare for retirement.

"While the savings message that we have been campaigning on for several years is getting through, with people scared that they will not have enough to live on in retirement, this hasn't necessarily translated into pensions savings.

"Traditionally in times of economic uncertainty, long terms savings have increased but people need to ensure that they are saving into the right vehicle; the best investments for those seeking security in retirement are pensions."

The Scottish Widows Pension Index, which tracks the percentage of people saving adequately for retirement, has risen from 49 per cent in 2007 to 51 per cent in 2008.

The Scottish Widows Average Savings Ratio, which tracks the percentage of income being saved for retirement by UK workers not expecting to get their main retirement income from a defined-benefit scheme, rose from 7.9 per cent to 8.7 per cent. This is the highest level recorded since the yearly survey started in 2005.

Both figures are based on those aged 30 or over and earning at least £10,000 a year.