Three-quarters of Britons are retiring on incomes of just £2,000 a year or less from their private pensions, research showed today.
Nine out of 10 people who retired between 2004 and 2009 had accrued a pension pot worth less than £50,000, while 77% had saved less than £30,000, according to annuity specialist Partnership.
The group said at current annuity rates, a pension pot of £30,000 would convert into an annual income of just £2,000 a year.
Even once the basic state pension is included, single people will still have a retirement income of just £7,000 a year, while couples will receive around £10,100.
In both cases this is significantly less than the current level of average earnings of around £26,000.
The group warned that one in four pensioners currently lives in poverty, and the situation could get worse unless people start saving more for their retirement.
Philip Brown, head of retirement products at Partnership, said: "The figures demonstrate that, put simply, people are not investing anywhere near enough for their retirement years.
"The data reveals that barely one in 10 people have a non-state pension pot of over £50,000.
"And with well over two-thirds of all of those in the post-50 age group having less than £30,000 in an annuity - which at today's rates would typically give an annual income of just £2,000 a year, or £40 a week - the burden on an already heavily stretched state is going to be massive."
The group also found that only 38% of people were taking advantage of the so-called open market option when they bought an annuity.
The open market option enables people to buy an annuity, which is used to convert their pension pot into a retirement income, from any provider in the market, meaning they can shop around for the best rate.
* Partnership analysed figures from the Association of British Insurers.Reuse content