Millions of UK adults could be set to downsize to a smaller property in order to release money to fund their retirement, a new study has revealed.

The Association of British Insurers (ABI) has published the latest results of a survey which shows that over half of people (53 per cent) are concerned that they will have insufficient income in retirement to maintain their current standard of living.

With the majority of this group of respondents recognising that they will not be able to live out their later years in comfort on the state pension alone, many are turning to alternative sources of retirement income.

One in five consumers would be willing to sell their current home to ensure they can enjoy a comfortable retirement, while a quarter of people are preparing to work beyond their planned retirement date to help boost their savings.

The ABI's Time to Act: Tackling our Savings Problem and Building our Future report also underlines the importance of saving for retirement early.

By increasing an annual pension contribution from eight to 12 per cent, UK adults can boost their pension pot by 50 per cent. In contrast, those who delay saving into a pension scheme by five years can see their final pension pot slashed by 17 per cent.

Steve Gay, the ABI's director of life, savings and pensions, claimed that the upcoming auto-enrolment initiative - which would see employees automatically enrolled into a workplace pension scheme - could help tackle Britain's savings gap.

He said: "One in two people are not saving enough for their retirement, and many are not saving at all.

"Too many people are caught between a rock and a hard place: rising life expectancy makes the need to save for the future more important than ever; yet the tough economic times are understandably putting the squeeze on family budgets.

"Auto-enrolment will bring at least seven million people into the savings habit."