Two-thirds of people set to retire this year run the risk of not having enough pension savings to sustain their desired level of income, according to a report from Standard Life Aberdeen.

The provider's Class of 2021 report found retirees plan to spend an average £21,000 a year, which is about £10,000 below the average UK household income of £29,000.

However, when assessing their pension pots, and adding in expected state pension income, analysis showed that two-thirds (66%) run the risk of running their pots dry if they spend the full £21,000 a year.

The average value of a Class of 2021 pension pot was £366,000 - but a third (33%) said they had pots below £100,000 saved.

Some 2,000 people were surveyed for the study in February this year.

Standard Life Aberdeen retirement advice specialist John Tait said: "Vast numbers of those retiring this year risk running out of money in their retirement. Retirement is a marathon, not a sprint, and many could be going into it without sufficient preparation or planning.

"Pension pots are without a doubt the most popular option for funding retirement, but it's so important that retirees consider any other savings or assets they can use when deciding whether they can afford to retire or not."

The paper also found a third (37%) were worried they would run out of cash during retirement while confidence levels about retiring varying between the sexes - a third (34%) of women felt very confident compared to two in five (43%) men.

Almost half (48%) said they were planning to reduce their usual spending to support themselves in retirement, while a quarter (27%) will work part-time to help financially. One in five (21%) are planning to sell their home or downsize to fund retirement, the survey found.

Tait added: "Understanding what money you have for your retirement and how to spend it wisely can be hard, but that's where preparation and speaking to an expert can help.

"Circumstances or priorities may change, particularly if you're retiring amidst a global pandemic, but it will be much easier to adapt a plan you already have, than if you were to have to start from scratch."

The study also found the pandemic had caused many people to accelerate their retirement plans, despite worries over financial readiness.

It said two out of five (37%) had moved their retirement date forward during the past 12 months due to Covid-19. Health worries and job uncertainty were other factors for speeding up retirement.

However, there are some apprehensions about retiring during a pandemic remained with more than half (51%) stating they were worried about not being able to do things they planned and two in five (43%) were concerned they would not be able to see friends and family.

Three in ten (29%) had concerns about their pension falling in volatile markets, and almost a fifth (17%) reported their income had dropped over the past year.

Standard Life Aberdeen head of retirement advice Ben Hampton said: "Deciding how and when to retire is one of the biggest life decisions and transitions we make.

"Longer life expectancy, volatile investment markets and ever-changing regulation can make planning and preparing for retirement feel confusing, not to mention the impact of the coronavirus pandemic on people's immediate and longer-term financial priorities and plans.

"Whatever the plan, when it comes to making the decision to retire, most people find it understandably daunting. Even more so if you don't feel prepared. We hope the findings from our research help to inspire tomorrow's generation of retirees, igniting a spark in them to create a plan they can have confidence in for their retirement."

First published by our sister title Professional Adviser