As well as a huge pensions shortfall, there is also a knowledge gap amongst consumers when it comes to preparing for their retirement.
Earlier in the week, the Chartered Insurance Institute warned that pensioners are achieving just 30% of their pre-retirement earnings as annual income after they stop working.
This is significantly less than the 70% that is believed necessary to maintain an adequate lifestyle.
Now MGM Advantage has said that it has seen evidence of a worrying lack of knowledge from customers approaching their retirement, and has called for better financial education.
"Although there is now greater consumer understanding of the importance of planning and saving for retirement, many people are failing to shop around when their pension matures to ensure the best possible income once they have retired," Chris Evans, chief executive of MGM Advantage, said.
The pressure on people to save sufficiently for their retirement is being made greater by inflation that is currently twice the Government's target of 2%, as well as other economic pressures.
Retirees have also seen their potential incomes fall as a result of declining annuity rates.
In addition, recent research by the retirement income specialist found that collectively UK households need to find an extra £35 billion to maintain the standard of living enjoyed just 12 months ago.
For households where the main occupants are aged 65 - 74, the corresponding figure is £2.8 billion and where they are aged 75 and over, it is £2.19 billion.
It estimated that to maintain the same living standards as a year ago, the UK population would need to spend an estimated additional £571.85 per person.
If you're approaching retirement, our annuity best buy charts are an ideal starting point when searching for the best annuity rates.
An online annuity planner service, such as that offered by Premier Retirement Services, should also be considered.
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