Average income drops by at least a third at retirement

In addition, the company has also identified the regions where consumers are likely to see their income drop the most between employment and retirement with London (-48.05%), East of England (-40.20%) and the South East (-39.51%) topping the list.

On a county basis, those in Buckinghamshire (-45.37%), Cambridgeshire (-44.39%), Leicestershire (-42.11%) and Hertfordshire (-42.01%) are the most likely to see a significant reduction in their income when they finish work (see notes to editors for in-depth county analysis).

Region	Employment Income	Pension Income	% Change
London	£20,300	£12,000	-48.05%
East of England	£19,900	£11,900	-40.20%
South East	£20,500	£12,400	-39.51%
Scotland	£18,900	£11,500	-39.15%
East Midlands	£18,300	£11,200	-38.80%
West Midlands	£18,100	£11,100	-38.67%
Yorkshire & the Humber	£18,000	£11,200	-37.78%
North East	£17,900	£11,400	-36.31%
North West	£17,900	£11,500	-35.75%
Northern Ireland	£17,400	£11,200	-35.63%
South West	£17,900	£11,600	-35.20%
Wales	£17,500	£11,600	-33.71%
United Kingdom	£19,000	£11,600	-38.95%

This analysis of HMRC data suggests that those relying primarily on their pension income to fund their lifestyle are likely to suffer a nasty shock when they retire and it is imperative that people build up savings and investments ahead of retirement.

Andrew Megson, Managing Director of Retirement at Partnership said:

"While people in retirement are likely to have fewer outgoings, it is still hard to imagine that anyone would not feel the pinch if they lost a third of their income over night. Even if their pension is topped up by income from savings and investments or part-time work, it is still likely to be quite a shock.

"In addition, many will have to stop working earlier than they intended because of health and lifestyle issues so may miss out on the opportunity to make additional financial provision and they are likely to find that the gap is even more profound.

"However, people can maximise their pension income by shopping around and finding out if they are eligible for an enhanced or impaired annuity. While this is important for all those approaching retirement, it is particularly vital for those who live in more 'affluent' areas as if their provider uses post code pricing they may find they are worse off.