According to Prudential, rising food prices are hitting retirees hard, while income for them is growing at three per cent.

It added that retired pensioners between the ages of 65 and 74 are spending an extra nine per cent of their income on essentials, compared to the national average of four per cent.

Gary Shaughnessy, managing director of Prudential Retail Life and Pensions, said that older households “see a greater share of their expenditure” go on the cost of living.

“This, coupled with the fact that life expectancy has increased, is putting much greater pressure on income in retirement,” he added.

Earlier this year, Gordon Brown announced he would axe pension terms assurance as part of his 11th and final Budget as chancellor.

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