Vince Smith Hughes, retirement expert at Prudential, said: “Life expectancy is continuing to rise and someone turning 65 today can now expect to reach the age of 82.8.
“Unfortunately, many people aren’t taking the necessary steps to ensure that they will have enough money to fund a comfortable retirement, either through not saving enough or through opting for retirement products that won’t protect them against inflation.
“The average person retiring in 2012 expects an annual income of £15,500, which is 42% less than the UK average earnings.
“Retired people are more vulnerable to squeezes on their incomes. They face higher than average rates of inflation, as a result of spending a higher proportion of their outgoings on goods which are significantly impacted by inflation. Over the course of a 17.8 year retirement, typical pensioner inflation rates could reduce their spending power by 55%, if they don’t inflation-proof their incomes in retirement.”