Almost two thirds (63%) of UK adults are concerned about running out of money in retirement, according to research from investment and retirement firm LV=. Financial experts told MoneyWeek that anxiety is particularly prevalent among older people.
Money psychotherapist Vicky Reynal said the reasons for this fear can be multi-faceted, but are in part an "emotional defence". She said that as people become more conscious of ageing, physical decline and mortality, they may cling more tightly to areas of life where they still feel a sense of agency.
Reynal said many people struggle to transition from spending a salary to drawing down on savings, describing it as money they worked hard to protect and had focused on growing. Money coach Dennis Harhalakis said a lot of Brits feel proud about being thrifty and frugal, and that generational attitudes towards money also influence spending habits.
Lucie Spencer, partner at wealth manager Evelyn Partners, said retirees often need "permission" to spend money in retirement. She said many clients approaching retirement lived through tough times in the 70s and 80s and are frightened of going back to those times, with an inbuilt mindset of "must save, must save".
Financial advisers can help map out retirement spending based on factors such as desired lifestyle and savings. The service costs between £100 and £350 per hour, according to government advice website MoneyHelper. Spencer said she draws up cash flow models with clients which are revisited at regular periods, for example once per year, to project income, spending, savings and investment over time.
Reynal said having a structured financial plan in place can provide reassurance, and that if anxiety persists it could be worth seeking help. She said therapy can help in some cases by providing a space to talk about and face fears of dependency and ageing.