New research from SunLife showed 43% feared they would run out of money before they die, while one in five people over 55 felt worse off than they expected to be.

In the study of more than 1,000 homeowners aged 55 and over, two thirds of so-called ‘baby boomers’ blamed the rising cost of living for not being as comfortable as they had hoped and almost half believed poor interest rates had dented their savings.

Property wealth is expected to become increasingly important in the Financial Planning strategies of many clients who are in and approaching retirement, SunLife said.

While the average pension pot of someone over 55 is around £105,4962, SunLife’s research found that they have around £280,000 of equity in their homes and eight in 10 homeowners were ready to use their housing wealth to fund retirement options, with a third considering equity release to access some of the value tied up in their home.

SunLife chief executive Dean Lamble, said: “In some ways, there has never been a better time to retire – we’re living longer, enjoying healthier, more active lifestyles, and thanks to the new flexible rules around pensions, we have more freedom to spend our pension savings as we choose.

“But with the average pension pot of someone over 55 around £105,000, many don’t want to take out a lump sum and so reduce their pension income further, and people are clearly worried that they haven’t got a big enough pension to fund their retirement.”

A separate report, from the Institute of Fiscal Studies, showed people regularly underestimated their own lifespan, adding further pressure to their retirement savings.

Tom Selby, senior analyst at AJ Bell, said: “While the rapid rise in average life expectancy experienced in the UK over recent decades is to be celebrated, it also poses a serious retirement planning conundrum.

“If large numbers of people massively underestimate life expectancy and spend too much in retirement as a result, they risk running out of money early and potentially falling back on the state.”

He added: “The combination of underestimating life expectancy, overestimating investment returns and overspending could create a perfect storm for future retirees.”

“It is now critical policymakers focus attention on engaging savers approaching retirement to ensure they are better informed about their options and the potential risks.”