Fidelity International says that a failure to consider increased longevity and plans to draw heavily on savings in early retirement.could leave 90 per cent of pensioners with no savings to fall back on in the years before they die.

Simon Fraser, president of institutional business at Fidelity International, says: "People approaching retirement have yet to fully grasp the implications of increased longevity. Today's 65 year old has a 50:50 chance of reaching 87 years old and a couple retiring at 65 face a one in six change that one of them will live to be 100.

"People could find themselves in retirement for up to 35 years, almost as long as they spent in their working lives."

Nearly half of workers close to retirement expect to supplement their state and company pension with income from Isas, mutual funds and property, according to Fidelity.

But the investment manager says that withdrawing 10 per cent from this savings pot every year could mean that a retiree's savings lasts just eight years. Instead, it says that people should not withdraw more than 4 per cent a year from their savings if they want their income level to keep pace with inflation for the rest of their life.

Mr Fraser says: "The next generation of retirees is already planning to rely quite heavily on non pension savings. But unless a lot more time goes into sensible retirement income planning, it's not hard to imagine a situation where many new retirees will have run out of savings long befire a rainy day arrives."

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