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Retirement income often less than hoped for

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Many people are retiring on pension incomes that are substantially below the level for which they had planned while in work.

According to research by investment group, Schroders, the average retirement income is £17,200 a year, some £4,700 lower than people still in work anticipate their pension funds would deliver.

As a result, more and more retirees are having to dip into their savings.

Over the last 12 months, one in three retired Britons channeled an average of £7,000 from savings and investments in order to bolster their pension incomes.

Overall, £23 billion of savings went to pay for living expenses in the last year, the report claimed.

Robin Stoakley, a managing director at Schroders, said: “Rising livings costs and the potentially corrosive effects of inflation on annuities means that more people are supplementing their income with other investments.

“Despite this, there is a £160 billion void between anticipated retirement income and reality, which means that more retired people are dipping into their long-term savings just to make ends meet.”