Retirement increases financial problems by almost one third, with many people ill prepared for life as a pensioner, FSA research reveals.
The survey, which uses data from the British Household Panel, found 31% of people may face financial difficulties when they retire.
It examines how life events such as unemployment, bereavement and household status affect levels of financial capability.
Planning for financial security in retirement is especially important in the current economic climate, as more people than ever are facing difficult financial situations and finding their financial capability skills to be insufficient, says the FSA.
In response to the findings, the FSA and ABI have teamed up to launch an online pension calculator to help people gauge how much they will have to live on in retirement.
Available on the Moneymadeclear website, the calculator enables anyone with a pension fund from a previous employer, as well as those paying into a pension scheme, or people without any existing pension, to calculate their potential retirement income based upon regular payments.
With personal circumstances frequently changing, users are also able to adapt the criteria to suit changing circumstances, such as investigating how their potential future income can be affected by retiring earlier or contributing more.
Further functionality will be added to the calculator in future.
"For many people, pensions are not something they want to think about until retirement is imminent and by then they may find their pension falls far short of the lifestyle they had hoped for," says Chris Pond, FSA director of financial capability.
He says it is important to make the most of savings by considering the choices available.
"The pension calculator can help you identify the implications of your pension choices and impact on later income to determine if you are on the right track."
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