Millions of people in the UK could find themselves faced with a far lower income in retirement than is generally considered adequate, according to data from PensionBee.

To achieve a 'comfortable' retirement, the Pensions UK Retirement Living Standards benchmark suggests a single person would need an annual income of almost £44,000, while a 'moderate' standard of living would require an income of £32,000.

However, PensionBee said its figures suggest the average pension pot at retirement age stands at around £88,000, which, when combined with the state pension, would provide an annual income of around £18,000.

The figures were published as part of PensionBee’s response to an All-Party Parliamentary Group (APPG) call for evidence on retirement income.

The provider said that uncertainty around life expectancy, inflation and market volatility, as well as the high cost of regulated financial advice, all made effective retirement planning difficult.

As a result, many people fell into “convenient” rather than “optimal” retirement options, often making overly-cautious decisions that impact income in later life, it said.

Pressures on retirement income, such as frozen tax thresholds, were also leading higher numbers of people to work beyond the state pension age out of necessity, PensionBee said.

Commenting on the data, PensionBee chief business officer UK, Lisa Picardo, said: “Too many people are approaching retirement with expectations that simply don’t match the reality of their savings.

"The gap between what people need for a reasonable life in retirement, and what their pension is likely to deliver them as an income, is growing – yet individuals are still expected to navigate complex decisions at a time when their confidence is often lowest.”

She added: “Set against an economic backdrop characterised by volatility and uncertainty and faced with the pressure of rising costs of living, the need for stability and clarity in pension policy has never been more important.

"Without clearer information, earlier guidance and support that is easy to access and understand, many savers will continue to make short-term focused, or overly cautious, decisions that may limit their income in later life.”

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