THE south west's retired people have an average disposable income of £13,652.

Only three per cent of the UK's retired population have £40,000 or more a year to spend, one in three survives on less than £10,000 and thousands do not claim the benefits to which they are entitled.

The statistics come from research conducted by Prudential which has discovered that retired people have adopted a number of measures to improve their spending power:

Up to 727,580 have sold their homes or part of their homes to release equity;

about 1.56 million work part-time;

nearly 208,000 have moved in with their children or friends.

Food and drink are top of the list for spending among retired people, with each person spending £2,063 a year.

Roger Ramsden, marketing director for Pru UK and Europe, said: "Many people are shocked by how much their annual income drops when they retire.

"People need to take much greater control over their financial planning."

For more information log on to www.pru.co.uk/plan