In its annual State of Retirement report, LV also revealed that a fifth of women have no pensions savings within five years of retirement and will rely solely on the state pension.
A total of 30 per cent of women aged over 50 expect to work longer than anticipated, compared to a quarter of men (23 per cent).
LV – formerly Liverpool Victoria – also found that 12 per cent of retirees have outstanding credit card debt, 7 per cent have an outstanding mortgage and 5 per cent are overdrawn.
While the average annual salary for over-60s is £25,480, the average annual pension income, including state pension, is just a third of that at £8,774 or £169 a week.
Richard Rowney, LV life and pensions managing director,, said: “Making the right choices on how to fund your retirement is now one of the biggest financial decisions you have to make.
“It’s clear that today’s retirees leave work with far more financial commitments to contend with than previous generations.
“Given that the age at which you stop earning a wage can have a significant impact on how much you have to fund your post-work lifestyle, it is not surprising that many choose to delay retiring.
“Although the vast majority of people will experience a drop in income when making the transition from working life to retirement, considering all the income options available and seeking financial advice will help to ensure that retirees are able to make the most of their savings and select a solution that best suits their needs.”
The report’s findings also indicate that the gender pay divide in the workplace continues into retirement.
The research suggests women have to survive on an annual retirement income up to 40 per cent less than the average man’s, at £6,580 against men receiving £10,967 a year. This equates to a weekly income of £126 and £211 respectively, and an income drop of 68 per cent for women compared to 60 per cent for men.
Of those within five years of retiring, almost a fifth (19 per cent) of women do not have any private pension savings at all, compared to 12 per cent of men.
The lack of private pension savings means this group will see their income fall by 78 per cent as they potentially have to live on £110 a week.
The survey found that 30 per cent of workers aged between 60 and 69 have changed their retirement plans in the last 12 months and 85 per cent expect to retire later than planned.
Of those aged from 50 to 59, 17 per cent believe that they will have to work past the state retirement age for financial reasons while 19 per cent intend to continue working out of choice.
The findings suggest that some choose to delay retirement rather than save more, with 10 per cent having decreased pension savings by an average of £50 a year, which equates to a £535 million loss in retirement savings.
An LV spokesman said: “Traditionally by the time someone reaches retirement they would have paid their mortgage off and have fewer financial commitments. However, today’s retirees are not only facing a considerable income drop, they’re also entering retirement with outstanding debts.”