A third of Britons in their 40s and 50s are nervous and depressed about the prospect of retiring, with financial worries the main cause of sleepless nights.
Insurance company Prudential said 33 per cent of people aged between 45 and 54 had anxieties about giving up work, a feeling that was shared by 27 per cent of people aged between 55 and 64.
At the same time, Prudential's 'Mood of the Nation Index' found that a quarter of people had found life financially harder since they retired.
The research also suggests that some four million people aged 55 and over have less disposable income than they did 12 months ago with many having fallen further into debt.
Over the past 12 months, two million people aged 65 and over and the same number aged 55-64 have seen their disposable income fall. One of the effects of this is that 776,000 people aged 55 and over have had to take on more debt and many have been forced to raid their savings.
Indeed 24 per cent of people aged 65 and over said that the value of their savings fell over the past 12 months compared to only 12 per cent who said that they had increased.
Unfortunately, the research suggests that for many people in this age group, their financial situation could deteriorate further during the remainder of this year.
Angus Maciver, Director of Research at Prudential said: "More than two million people currently continue to work in retirement and we expect this number to grow - especially as they have over £1 billion in unsecured debt to service."
Yet the survey also found that an estimated 775,000 people who had retired wanted to return to work but were unable to find a job because of their age.
To make matters worse, one in five people aged 65 and over expect their disposable income to fall over the next 12 months and only 16 per cent think it will increase.
Compounding these difficulties, the Prudential also revealed that 72 per cent of people (rising to 85 per cent among women) did not seek any financial advice before they retired.
And one in seven people did not think it necessary to set any money aside for their retirement because they believed that the state pension would be sufficient.
"The reality is that many pensioners are in financial difficulty.", said Prudential's Debbie Falvey.
"With such an appallingly low number of people seeking financial advice before retiring, it is little wonder people are feeling anxious about leaving the workforce."