“With rising living costs, people with retirement drawing closer must urgently review their options and speak with a financial adviser to ensure they will have adequate provision.”

Expected pension incomes have fallen to the lowest level in six years, according to Prudential.

The survey reveals average retirement income estimates have dropped by more than 18% since 2008 to £15,300. Incomes have also fallen in four of the past five years.

In 2008 retirees looked forward to a total average annual income, including private, company and state pensions, of about £18,700 – £3,400 a year more than those planning to retire this year.

Retirees in 2012 could expect an average income of £15,500.

Prudential has said the fall in incomes is even higher due to rises in living costs.

Since 2008, inflation has caused prices to rise by 14.7%. A 2012 retiree would need an annual income of £21,400, to have the same buying power as an average person entering retirement in 2008.

However, despite expected average retirement incomes falling nationally overall, they increased over the previous year in certain regions. Yorkshire & Humberside saw an increase of £600 to £13,400 and the South West saw an increase of £500.

Vince Smith-Hughes, Prudential’s retirement income expert (pictured), said: “The continuing trend is even more concerning, when you consider that rising inflation is eroding pensioners’ spending power in real-terms.

“Wherever possible, people entering retirement should consult a financial adviser or retirement specialist, who will be able to talk them through all of the retirement income options available to them.”

He added: “It can be tempting to go for whatever product offers the highest initial income, but this might not be the best value in the long-run as it could leave dependents at risk, or fail to protect against rising living costs.”