The amount of money people think they will need in retirement has fallen as extravagant spending takes a backseat and consumers tighten their belts.

According to research by CoreData, the average individual believes £18,000 a year, or £1,503 a month after tax, will be enough to live on when they retire.

Two years ago respondents to the same survey anticipated needing £27,000 a year or £2,329 a month in order to enjoy a comfortable retirement.

The minimum income standard set by the Joseph Rowntree Foundation is £14,400 per annum or £1,200 a month. This would cover all of the bare necessities a retiree needs.

CoreData's latest sum is just £2,400 above this level, while in 2010 it was £13,548 higher.

Craig Phillips, principal of CoreData Research UK, said: "The drastic drop in the forecasts of how much money people think they will need suggests that the days of overblown extravagance are over and people can be considered to be more realistic about the lifestyle they will be able to afford."