Many retirees are finding a funding gap as a result of under-estimating how much money they would need after finishing work.
Research conducted by Scottish Widows found that half (50%) of all people faced a funding gap when they finished work.
Only one quarter of these (26%) planned ahead and built up extra savings or investments specifically for their retirement, with the rest having to make up the shortfall by downsizing or taking an income from their property (11%) and taking on a part time job (10%).
Ian Naismith, savings expert at Scottish Widows, said that people should aim to save 12% of their salary from the age of 30 to ensure they have enough money in retirement.
"Many people underestimate how much money they will need when they retire to have the lifestyle they are accustomed to," he added.
Other figures showed one third (30%) said they did not have enough money to enjoy their new free time to the full , while over one in five (23%) of those in retirement miss the sense of structure which comes from working life.
Encouragingly, those aged 50 plus, but who are yet to retire, have a more realistic grasp on their financial predicament, with the majority (81%) aware that their current finances are not enough to sustain the lifestyle they want.
Two in five people are planning to take on a part time job to make up the shortfall, while a similar number want to work past their retirement age in order to achieve the lifestyle they want.
It is hoped that the retirement gap could be narrowed by the introduction of the auto-enrolment initiative.
The programme will be fully rolled out by 2016 and will mean that all employees will be enrolled onto a workplace pension scheme.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
Moneyfacts.co.uk will, like most other websites, place cookies onto your computer’s
hard drive. This includes tracking cookies.