One aspect of this can involve selling assets, sometimes even the roof over their heads, to make ends meet, or finding an alternative income, such as a lodger.

Anthony Frost, a spokesperson for Prudential, says although a lodger may seem like a good idea for the extra revenue it will bring in to the house, it is nevertheless a “drastic solution”.

“There are various things to take into account when you welcome a stranger in your home,” he warned.

In addition to the obvious security risks it may pose, there are the financial implications to consider as well, he continued.

“Before considering taking in a lodger, pensioners should get advice, as such a decision could have a financial impact,” Mr Frost claimed. “Pensioners who take in a lodger can face an increase of their tax band, for example.”

Despite the rise of private pensions in the last 25 years and recent research suggesting that those in retirement have never been better off, financial institutions still feel as if there are problems with the way pensions and the older generation are taken care of.

To read more about pensions, click here.

© Adfero Ltd