People retiring in 2012 expect to live on an average annual income of £15,500 – over £1,000 a year (6%) less than those who retired in 2011. The figures come from Prudential’s Class of 2012 research which provides insights into the financial expectations of Britons planning to retire in the next twelve months.

The results of Prudential’s annual survey, first carried out in 2008, show that expected annual retirement incomes have dropped by more than 16% in the last five years. The Class of 2008 retirees looked forward to a total annual income, including private, company and State pensions, of approximately £18,600 – £3,100 a year more than those planning to retire this year.

In a sign of the ongoing financial challenges facing those due to retire in 2012, one in five will get by on an expected annual income of less than £10,000. Meanwhile, around the country there is a regional disparity of more than £5,000 in expected retirement income. Londoners have the highest average expected incomes of £17,900, while those in Yorkshire and Humberside have the lowest at £12,800.

Fewer than two in five (37%) of the Class of 2012 say that they have saved enough to secure a comfortable retirement.

Men are more optimistic about their retirement than women, with 45% of men confident they will be financially comfortable compared with 31% of women. However, nearly one in five (18%) of those planning to retire in 2012 have no idea of the level of income they will need in order to live comfortably.