Retirement income hits six-year low

Expected retirement income has declined for the second year in a row to hit its lowest level for six years.

New research from Prudential shows the average income people in retirement expect to live off now stands at £15,300 per year.

This is £200 lower than it was in 2012 and a substantial decrease from the £18,700 that was recorded in 2008.

As a result, those approaching retirement may wish to ensure they are debt free before they finish working, so they do not have to use any of their pension funds to pay off credit cards or other financial products.

Anticipated retirement funds have now fallen for four of the past five years and retirement expert at Prudential Vince Smith Hughes said those leaving the workforce in 2013 "are continuing to feel the squeeze".

"The continuing trend is even more concerning, when you consider that rising inflation is eroding pensioners' spending power in real terms," he added.

Prudential's research showed that despite the average nationwide expected income decreasing, five regions across the UK have actually seen a rise – London, the south-west, north-west, Yorkshire & Humberside and Scotland.

By James Francis