Pension incomes are set to fall for the third consecutive year with the average income for Brits retiring this year down by more than seven per cent, according to Prudential.
Research by the pension and investment provider has revealed that Brits who are planning to retire in 2010 expect to receive an estimated £1,200 a year less than those who retired in 2009 as the average expected income fell to around £16,500.
This follows last year's decrease of 4.7 per cent when the average income expected for both men and women was down by almost £900 to around £17,800 compared to 2008's figure of £18,663 as pension funds felt the affects of the banking crisis.
In addition, 18 per cent of Brits who plan to retire this year are anticipating that their pension income will be less than £10,000 a year – representing a marked increase since 12 months ago when 11 per cent thought this would be the case.
Commenting, Andy Brown, director of investment funds at Prudential says these figures suggest that people are becoming more realistic with what to expect from their pension when they give up working.
"The recession has clearly had a major impact on peoples' expectations of their pensions. I think what we're seeing is the emergence of pragmatism following the credit crunch with people perhaps being more realistic about the anticipated size of their pensions, in the same way that many homeowners are now taking a more balanced view of the value of their property," he said.
Meanwhile, a significant number of people coming to the end of their working lives are sceptical that their pensions and savings will provide them with a sufficient income in their later years, as three in five Brits said they had doubts about whether they would have enough money to enjoy a comfortable retirement.
"The fact that people retiring this year expect to receive less in their pensions than people who have retired in the past two years should come as a reminder that putting money into a pension or other savings, and starting sooner rather than later, is the only real way of guaranteeing a decent income in retirement," Mr Brown added.
© Fair Investment Company Ltd