Fifth saving less towards retirement

Around 17 per cent of people who have either already retired or plan to do so within five years are setting aside an average of £342 less each month than they were a year ago, according to life insurer Liverpool Victoria.

People with private pension plans have made the biggest reductions to their savings levels at £434 a month or £5,208 a year.

The fall in the amount people are setting aside to see them through retirement is more than double the £137 a month drop in savings levels seen in 2009.

The group said the fall in the amount being paid into pensions and savings accounts, along with the fact that 25 per cent of people are not saving at all, suggested older people were being forced to deal with more immediate financial strains, rather than making provisions for the long term.

But it warned that although 17 per cent of people aged over 50 said they did not want to work on past the age of 65, many may be forced to do so.

The situation is being made worse for 32 per cent of people who are approaching retirement, as they said they were still being asked to provide financial support for their adult children.