Soaring inflation has sparked major worries about how people can afford to live in retirement and how much pensions will be worth when they quit work, Bank of Ireland has reported.

Thousands have seen the value of their pension funds fall by 10% over the past year as inflation eats away at their savings.

At the height of the pandemic, a surprise result of the Bank of Ireland savings index was how increasingly comfortable people believed they would be in retirement.

However, months of consistently high inflation - which is now at 8.9% - is by far the main concern for people, at 26%, followed by a global recession at 16%, while housing and rental costs are at 12%.

In May 2020, just 24% of people were concerned that they would find retirement very difficult or quite difficult, but by November this year, that had shot up to more than one in three - 35%.

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A large number (41%) of people indicated they are either "somewhat or completely unprepared" financially for their retirement.

And more than half (58%) of those polled said they were either saving nowhere near what they should be or a bit less than they should be, owing to the rising energy and grocery costs.

Bank of Ireland's head of pensions and investments, Bernard Walsh, said: "It's clear that the onslaught of inflation has led a lot of people to think more about how they will fare in retirement and how well prepared they are financially. Concerns are clearly rising."

The rise in inflation and consequent European Central Bank interest rate hikes also mean homeowners with tracker mortgages have seen an immediate jump in their monthly repayments. Banks' variable rates are expected to start rising soon too.

Energy prices have been increasing sharply as well, while rising prices have also now spread to food.

Inflation is eating away at people's pension funds, causing anxiety among retirees and those close to retirement, according to finance expert Brendan Burgess, of askaboutmoney.com.

"The people who need to be most concerned are people who have annuities - a fixed sum paid out each year - which are not linked to inflation," he said.

"Because they will see the real value of their pension going down. They have lost the real value of their money by 10% over the last year."

However, pensioners are well cared for in the Republic with a weekly State pension of €253.80, compared to €161.48 (£141.85) in the North.

Bank of Ireland's chief investment strategist, Kevin Quinn, said: "For the second survey in a row, the cost-of-living crisis is top of the concerns for Irish households and consumers."

Despite the economic gloom, when people were asked to look six months down the line, there was a 5% improvement since the previous three month survey in August.

The poll of more than 1,000 of the bank's customers nationally also found that 12% of people were concerned about climate change.