Annual retirement income from annuities has dropped by three-quarters since 2000, according to Moneyfacts.
Based on a saver contributing £100 per month into an average personal pension fund over a 20-year period, the website found that annuitants are markedly worse off.
Moneyfacts says a saver retiring in 2000 would have accrued a pension fund of £89,366, with more favourable annuity rates equating to an annual retirement income of £7,748 per year.
Based on the same contributions, a saver retiring this year would have a fund of just £42,440 because of poor investment returns, while worsening annuity rates mean their savings would buy a likely annuity income of just £2,109.
The figures even show the situation worsening in the near term, with retirement income down 8% on figures for 2014, when a retiree could expect £2,292.
The site warns the scale of depreciation in annuity rates means even contributions of £300 a month may not be enough to build up the kind of income witnessed by savers at the turn of the century.
Whilst such saving would generate a post of £127,322 over 20 years, it would still only equate to an annuity of £6,327.
Moneyfacts Investment Life & Pensions editor Richard Eagling says: “There’s a real danger that tomorrow’s pensioners will end up in poverty.
“Private pension provision is still being neglected, and dreams of a comfortable retirement could easily be shattered unless individuals can either make up the pension shortfall through greater contributions, or accept that they may have to delay their retirement.”