Pension savings make up less than two fifths (36 per cent) of retirement income on average, dropping to less than a third (31 per cent) for single pensioners, research from ISIPP has revealed.

The group's analysis showed that average incomes before tax are around £30,570 for pensioners rising to £41,130 for couples and dropping to £20,120 for single pensioners.

On average, around £11,100 was provided by pension saving, whether occupational or personal, while investment income contributed just over £2,100 year to average incomes, and earnings amounted to more than £3,800 a year across all retired people.

However, benefits including the state pension made up a bigger proportion of incomes at 44 per cent of the total income.

For retired couples, pension income accounted for nearly 39 per cent of the total pre-tax income, while investment income contributed around 7 per cent and earnings made up around 16 per cent.

However, pensions accounted for just 31 per cent of income for single retired people, with benefits responsible for nearly 56 per cent of income, while investments provided just 6 per cent and earnings 7 per cent.

Commenting on the findings, ISIPP managing director, Hrishi Kulkarni, said: “Private pensions make a major contribution to income in retirement with more than 70 per cent of retired people having some income from retirement savings either through an employer or private pensions.

“However, it is instructive to find out that pensions only provide 36 per cent of income in retirement with benefits including the state pension accounting for a higher proportion of retirement income.

“Increasing saving for retirement can have a major impact on how comfortable people are when they stop work and that should also include keeping on top of pension savings you no longer contribute to.

"Consolidating them into one fund can help reduce fees and potentially improve their performance.”

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