19th June 2026

Expectation: the retirement spending conundrum

Clients’ spending plans are a pivotal input to retirement planning, but rarely clear. We explore why estimates miss the mark and how advisers turn uncertainty into workable strategies.

The most pressing question for many clients is “how soon can I retire?”. While there are a fortunate few who love their work, many are in a hurry to end the responsibilities of a full-time job. To understand when someone can retire requires an understanding of whether they have enough money – and that requires an idea of their spending habits. This is proving a stumbling block for many advisers.

All advisers will be familiar with the variability of spending habits: one client’s luxury is another’s impoverishment. Perhaps more importantly, clients are consistently poor at estimating what they will need. While there are questionnaires and analysis tools, expenditure remains one of the most difficult areas to capture accurately, and yet one of the most important inputs into financial planning.

The latest research from BNY Investments and NextWealth – “Retirement Advice in the UK: Turning Insight into Outcomes” – showed advisers overwhelmingly agreed that clients do not accurately estimate how much they need for retirement. Half say clients underestimate their needs. This has one obvious side-effect: not having enough money to support their lifestyle. However, there are also risks for those who overestimate their needs, potentially leaving significant chunks of capital ready to be scooped up in inheritance tax. Under the new rules on the inheritability of pensions, leaving unused pensions may be problematic.

One adviser said: “I’d say expenditure is one of the biggest challenges. Some just aren’t interested, and you see how big of a problem it is after a few meetings. If they’re clearly big spenders, then that needs a lot more discussion and maybe a slightly more rigid retirement strategy.”

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Investments, Retirement