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How to avoid running out of money in retirement

Nearly half the population is concerned their savings won’t last through retirement. Taking action sooner rather than later is crucial.


With life expectancy in the UK now just under 81 years1, the average person might hope to spend around 45 years working and 15 in retirement. This would mean that you have just over half your lifetime to save the funds needed to support you throughout the final fifth.

When seen in these terms, perhaps it’s no wonder that 48% of UK adults are concerned that their savings won’t last, according to our recent survey. While these concerns are often valid, the pivotal step is recognising the issue and taking prompt action.

The risk of running out of money is real

A generation or two ago, most retirees enjoyed the security of a ‘final salary’ pension that guaranteed an income for the rest of their lives. Due to the gradual closure of these schemes over the last twenty years, the majority now rely on ‘defined contribution’ pensions that you pay into throughout your working life and draw from in retirement.

There are many advantages to these pensions, such as the flexibility to increase and decrease your income as you wish, and the option to pass wealth tax-efficiently through generations. However, one of the drawbacks is the possibility of depleting the fund and running out of money in your lifetime.

To avoid this, it’s crucial to establish a sustainable withdrawal rate. We recommend doing this with the help of a professional, who can use cashflow modelling for greater accuracy. It’s also important to review your forecast at least once a year to ensure you have plenty left.

Financial depletion isn’t the only concern

While not quite as daunting as the idea of exhausting your retirement fund entirely, another real risk is the inability to maintain your desired lifestyle with the income your pension provides.

Typically, people need less income in retirement than they did in their working life, as certain costs (such as mortgage payments and childcare) have ceased by this point. Still, a significant drop in income would usually mean making some sacrifices or compromises.

In our recent survey, 67% of working respondents expect their income to drop in retirement, while 24% don’t know or prefer not to say. The reality is slightly bleaker; 77% of retired respondents say that their income has dropped, and more than one in four (26%) say that their income is less than half what it was.

If you’re keen to avoid such a large drop in income, your best option may be to continue to work and save, waiting until you’re confident you have enough to last before you retire. To make your savings stretch further, you can also seek expert advice on the most tax-efficient way to make withdrawals.

Over-65s feel the most confident in their savings

There is some good news in that the over-65s age group (i.e. those who are already retired or on the brink of retirement) are the least apprehensive about the longevity of their savings, according to our survey.

Two in three people in this age group express no concern about their savings lasting, in part because some are lucky enough to have a final salary pension to rely on (43% of those who are not worried told us that this is why).

Still, one in three over-65s are concerned. If those people are still working, they may need to consider pushing back their retirement until they’ve built up a bigger fund. If they have already retired, they might consider returning to work part-time or making cutbacks to help their savings last for longer.

Generation X faces bigger challenges

A significant majority (70%) of people aged 45-54 are concerned that they won’t have enough money in retirement.

In this age group, final salary pensions are rare. Plus, since most of these people were in work for a decade or two before pension auto-enrolment was introduced in 2012, some overlooked the need to pay into a defined contribution pension. These factors combined have left this demographic underprepared.

Nonetheless, with ten or twenty years before retirement appears on the horizon, there is plenty you can do to secure a better retirement. Since everyone’s income, expenditure, and circumstances are different, it’s best to seek personalised advice from a financial planner to understand what steps to take.

Women may have greater concerns than men

Overall, more than six in ten (61%) women are concerned that they won’t have enough money in retirement, compared with 53% of men. This is a realistic reflection of the additional hurdles that women face, given that they tend to earn less in their lifetimes and tend to live longer than men.

Women grappling with retirement anxieties should rest assured that a financial planner will offer empathetic, non-judgmental support, and provide advice that accounts for their specific circumstances, such as years spent out of the workforce.

How to get the advice you need

Conventional retirement wisdom is to save as much as you can, as early as you can. However, we realise that this isn’t always possible or practical, and everyone faces different obstacles to maintaining the ideal level of pension contributions. Rather than looking back at missed opportunities, our goal is to help you make the most of the ones available to you now.

You can contact your local Investec Wealth & Investment (UK) office to arrange a chat with one of our financial planners. Taking the first step today could make a world of difference to your quality of life in retirement.


1 The World Bank Group

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Investec Wealth & Investment Limited, a subsidiary of Rathbones Group Plc, would like to keep in touch to send you exclusive event invites, market update information, news relevant to you and information about our products and services.

Please confirm if you are happy to receive these communications from us by ticking the box below:

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Investec Wealth & Investment Limited, a subsidiary of Rathbones Group Plc, would like to keep in touch to send you exclusive event invites, market update information, news relevant to you and information about our products and services.

Please confirm if you are happy to receive these communications from us by ticking the box below:

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Investec Wealth & Investment Limited, a subsidiary of Rathbones Group Plc, would like to keep in touch to send you exclusive event invites, market update information, news relevant to you and information about our products and services.

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Investec Wealth & Investment Limited, a subsidiary of Rathbones Group Plc, would like to keep in touch to send you exclusive event invites, market update information, news relevant to you and information about our products and services.

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Investec Wealth & Investment Limited, a subsidiary of Rathbones Group Plc, would like to keep in touch to send you exclusive event invites, market update information, news relevant to you and information about our products and services.

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Investec Wealth & Investment Limited, a subsidiary of Rathbones Group Plc, would like to keep in touch to send you exclusive event invites, market update information, news relevant to you and information about our products and services.

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For more information on how we use your data, please see our Privacy Notice.


Investec Wealth & Investment Limited, a subsidiary of Rathbones Group Plc, would like to keep in touch to send you exclusive event invites, market update information, news relevant to you and information about our products and services.

Please confirm if you are happy to receive these communications from us by ticking the box below:

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For more information on how we use your data, please see our Privacy Notice.

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Important information

The contents of this publication do not constitute a personal recommendation or advice and the products and/or services referred to may not be suitable for all investors. It is important to consult a professional adviser before taking any action or making any decisions.

The value of investments and the income derived from them can go down as well as up and you could get back less than you originally invested.  Your capital is at risk.

Tax treatment is dependent on individual circumstances. This information is provided in good faith and is based upon our understanding of current tax law and HMRC practice, which may be subject to change in the future.

Investec Wealth & Investment (UK) is a trading name of Investec Wealth & Investment Limited which is a subsidiary of Rathbones Group Plc. Investec Wealth & Investment Limited is authorised and regulated by the Financial Conduct Authority and is registered in England. Registered No. 2122340. Registered Office: 30 Gresham Street. London. EC2V 7QN.