Retirement income expectations rose for the third year in a row in 2016, with people who retired this year expecting to receive on average £17,700 a year, a Prudential survey of 1,000 retirees has revealed.
That was £2,400 - or 4 per cent - more than the post-crisis low of £15,300 a year in 2013, but still well short of the pre-crisis high of £18,700 in 2008.
Broken down by region, retirees in the south east were by far the best-off, expecting a retirement income of £21,500 a year. They were followed by retirees in East Anglia and the surrounding region, who expected an annual income of £19,000.
The worst-off region was the West Midlands, with an expected income of £15,200, followed by East Midlands (£15,400), the South West (£15,900) and London (£16,800).
But while expected income increased, so did the proportion of people retiring in debt.
In 2016, 20 per cent of people who retired did so in debt, up from 19 per cent in 2015 but the average amount of debt was down £3,000 at £18,800.
It was the fifth year in a row that the amount of debt held at retirement fell. In 2011 the average debt at retirement stood at £33,100
The amount of debt held by women at retirement was £7,000 below its 2015 level, at £17,800. At £19,600, debt held by men was virtually unchanged year on year.
"For many people, the switch from working life to retirement will see them getting used to living on a tighter budget and having to repay outstanding debts can only make this transition more difficult," Stan Russell, a retirement income expert at Prudential.
However, he said the overall proportion of people retiring in debt remained "stubbornly high", and he urged retirees not to wait until the day of their retirement to seek financial advice.
On the improved income expectations, Prudential retirement specialist Vince Smith-Hughes said the increase was "welcome", speculating the increased confidence of retirees may be down to the introduction of pension freedoms.
Earlier this year a report by the Institute of Fiscal Studies showed pensioners were now the least likely age-based demographic to live in poverty.
The report, released in July, found 12.1 per cent of pensioners were living below the poverty line in 2016, compared to 12.8 per cent the previous year.
That left them better off than working age people without children - 17.8 per cent of whom live below the poverty line - and much better off than children - 27.5 per cent of whom live in poverty.
Others, however, have argued that this trend is unlikely to continue, as fewer people retire with defined benefit pensions, and defined contribution fails to pick up the slack.