Retirees 'expecting lower incomes'

Less than half of people approaching retirement believe they have saved enough to live comfortably, new research suggests.

Just 37% of retiring workers said they had built up an adequate nest egg, with men more optimistic than women about their savings.

Overall, workers due to retire in 2012 expect to receive around £3,000 a year less than those who retired in 2008, according to a study by Prudential.

The annual poll found that those retiring this year expect to have an average of just £15,500 to live on, compared with an average figure of £18,600 in 2008.

And one in five of those retiring this year expects to have a yearly income of less than £10,000, the study found.

The tough economic climate has had a significant impact on those in retirement, with the Bank of England's decision to keep interest rates at a historic low leaving many people struggling to find a return on their savings.

High living costs, most notably soaring fuel bills, have also added to the financial burden on households.

Prudential spokesman Vince Smith-Hughes said: 'The current economic climate has created the perfect storm for people in the run-up to retirement.

'The impact of the credit crunch, banking crisis, recession and concerns over the eurozone has been reflected in the fact that expected retirement income levels have hit a five-year-low.

'It is concerning that expected retirement incomes are going down, while pensioner expenditure is going up.'

Copyright Press Association 2012