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Retirement is one of the most significant milestones in a person’s life. It gives you the freedom to try your hand at new hobbies, explore the world, or simply spend more time with your loved ones.

However, after years of carefully accumulating a fund that will support you during the next phase of your life, it’s normal to feel anxious about spending it.

If you feel this way, then you’re not alone. A survey covered by Money Marketing found that UK adults experience a range of negative emotions when they think about spending their retirement savings, including:

• Anxiety (26%)
• Fear (18%)
• Guilt (15%)

By contrast, fewer people associated retirement spending with positive emotions, such as:

• Security (17%)
• Excitement (15%)
• Relief (10%)

After decades of contributing to your pension, it can feel strange, or sometimes even scary, to start drawing from it.

Thankfully, effective financial planning can help ease this anxiety and ensure you’re ready to retire without the fear of running out of money. Continue reading to discover five ways we can help.

1. Check your pension is on track

A practical first step towards feeling comfortable about spending in retirement is to check whether your pension is on course to meet your needs.

Even if you’ve spent years diligently saving, you might be unsure if the amount is “enough” for your desired lifestyle.

A financial planner can help you review your pension and assess just how far it might stretch. If there are gaps, several options are available to you, such as:

• Delaying retirement
• Increasing your contributions
• Drawing from other sources of wealth.

Regular reviews might also help you stay in control of both your emotions and your wealth, as you will have more opportunities to adjust your plans as your circumstances change.

2. Ensure you’ve maximised your State Pension entitlement

The State Pension is essentially a guaranteed sum of money that the government pays when you reach State Pension Age (66 rising to 67 by 2028).

As of 2025/26, the full new State Pension offers £230.25 a week, equating to £11,973 a year. While this is unlikely to entirely support your desired lifestyle in retirement, it is still valuable.

Indeed, you could use it to cover day-to-day costs while relying on your private pension to deal with more significant expenses, such as dream holidays or long-awaited home renovations.

To receive the full amount, you’ll typically need to accumulate 35 years of National Insurance contributions (NICs), or 10 years to be eligible for any at all.

It might be wise to obtain a State Pension forecast from the government website. This allows you to identify any missing qualifying years and see how much you’re already entitled to.

If, after obtaining the forecast, you discover gaps in your record, you can make voluntary contributions to “buy” additional qualifying years for the past six tax years.

Just note that purchasing additional credits might not be for everyone, so it’s always worth speaking to a financial planner first.

3. Create a retirement budget and withdrawal plan

A detailed retirement budget can give you confidence that you have enough to cover the costs of the life you want to live.

To create one, first list your potential outgoings, which might include:

• Any mortgage or rental costs
• Utility bills
• Groceries
• Travel
• Social spending

Once you understand your spending needs, you can start thinking carefully about how you should withdraw wealth from your pension.

While it can be tempting to take the entire 25% tax-free lump sum immediately, doing so could limit the long-term growth of your fund.

For instance, Fidelity states that if your pension is worth £80,000, you could take £20,000 without incurring tax.

If you left that portion invested and it grew at 5% each year, it could be worth £124,000 after 10 years.

If you then took your 25% lump sum, it would be worth £31,000 – an additional £11,000.

Of course, growth is never guaranteed. Still, this shows why it’s so important to carefully consider the timing of any pension withdrawals.

4. Plan for unexpected expenses, such as care

Budgets are incredibly useful, but it’s important to remember that your income needs may not stay the same throughout retirement.

In fact, they often follow a “bell curve”.

You may spend more on holidays and hobbies at the start of retirement. Then, in the middle years, costs might reduce as you settle into a routine.

Later on, they may rise again if your health deteriorates and you require long-term care, which can be expensive.

Figures from carehome.co.uk reveal that, as of 23 September 2025, the average yearly cost of residential care for self-funders is £67,496, or £79,820 for nursing home care.

If you don’t account for these costs, you may end up drawing unsustainably from your pension in the early years of retirement, resulting in a shortfall in the future.

5. Work closely with a financial planner

One of the most effective ways to move past the anxiety of spending your retirement fund is to work with a financial planner.

They can use sophisticated cashflow modelling software to project your income, assets, and expenses over time.

This can show you whether your wealth is likely to support your lifestyle and cover unexpected expenses for the rest of your life.

Seeing these projections in black and white can help reassure you that you’re able to spend without fear of running out of money.

A financial planner can also highlight how different choices, such as retiring earlier or gifting money to loved ones, might affect your long-term plans.

To find out how we can help alleviate anxiety around spending, please email hello@solusfinancial.co.uk or call us on 01245 984546.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance. 

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.

Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation, and regulation, which are subject to change in the future.

The Financial Conduct Authority does not regulate cashflow planning or tax planning.

Approved by Best Practice IFA Group 09/10/2025.