By Claire West
The retirement income of more than one-third of people who stop working this year will mean they are below the poverty line, research has indicated.
Insurer Prudential said about 35% of people who retire in 2011 will get a pension of less than £14,400, the income level which the Joseph Rowntree Foundation is the minimum a single person needs.
Meanwhile, millions of people are being denied the chance to plan properly for their retirement because of Government proposals to accelerate increases to the state pension age, charity Age UK warned.
Women are significantly more likely to retire in poverty than men, the research found. It said that 40% of women expect to have incomes of below £14,400 a year, compared with 30% of men.
Age UK said it had been inundated with emails and letters from women who were furious that, having already revised their retirement plans once, they were now being forced to wait even longer before they could claim their state pension.
Up to 5 million affected
It estimates that the changes will affect 5 million people, cost the worst affected women up to £10,000 in lost pensions income and force even greater hardship on people who are reliant on the state pension, those from poorer backgrounds who have lower life expectancy and those who are too ill or disabled to work.
The charity said the plans not only broke a promise made in the Coalition Agreement, but they would not have any impact on the deficit as no savings would be made before 2016, by which time the Government plans to have already eliminated it.
Focus groups carried out by Age UK found that despite understanding the need to increase the state pension age due to rising life expectancy, people were 'universally shocked' by the speed at which it was being done.
More worryingly, some women still mistakenly thought they would be able to start drawing their state pension at 60.
Michelle Mitchell, Age UK's charity director, said: 'By breaking its promise on the state pension age, the Government is hurting millions of hard-working people who believed their retirement was just around the corner.
'MPs must wake up to the unfairness of these proposals and the level of anger simmering away in their constituencies.
'Given that life expectancy is increasing, the Government is right to look at reforming the pensions system. But this is too much, too soon.'