One of the biggest challenges clients face in retirement is not running out of money, it is learning how to spend it.
After decades of saving and investing, many people struggle to shift gears from accumulation to decumulation.
Spending, even responsibly, can simply feel uncomfortable or risky.
Advisers can empower clients to see retirement not as an end but as the beginning of a rewarding new chapter
Modern retirement looks nothing like the outdated images of golf courses and cruises.
For many, it is an active, evolving stage of life that calls for purpose and adaptability.
Advisers have the opportunity to help their clients make the most of this new phase of life.
The emotional barriers to retirement spending
Last autumn’s reforms confirmed that pensions would now be subject to inheritance tax rules.
This has dramatically increased the importance of the shift from saver to spender.
Advisers who can help clients navigate spending decisions with confidence are not only helping them achieve more rewarding retirements — they are also ensuring wealth is used wisely, rather than left exposed to unnecessary tax.
Adjusting to this shift is not only a technical process: it is also emotional.
As retirement coach Dan Haylett describes it, retiring involves a “180-degree turn”.
After years of careful budgeting and disciplined saving, those entering retirement must suddenly shift to spending.
Along with this transition comes a series of behavioural hurdles:
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Fear of running out. Even those with substantial assets worry about longevity risk, market volatility or unexpected expenses.
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Loss of identity. For many, work has defined their self-worth. Leaving it behind can feel disorienting.
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Regret risk. Some people reach retirement having barely touched their wealth, realising too late that they have missed opportunities.
Advisers who recognise these emotional patterns are best placed to help clients navigate them.
The hard numbers of financial advice matter, but it is critical that a balance is struck.
Why change? Why now?
Economic and regulatory shifts are reshaping retirement planning.
Pension reforms mean underspending could now come at a cost: holding on to pension assets too long can trigger tax exposure that could have been avoided through thoughtful drawdown or gifting strategies.
Meanwhile, market volatility and inflation continue to amplify caution among retirees.
Many would rather sit on their wealth than risk seeing it fall.
Anxiety about running out can prevent people from truly enjoying the retirement they have earned.
Advisers occupy a unique position of trust.
They can help, both as financial planning experts and as behavioural coaches.
When it comes to spending, both roles are needed to reach a decision that is right for the client.
Advisers can help clients view spending not as a threat to security but as a purposeful act — a way to enjoy the fruits of a lifetime’s discipline.
That starts with helping clients understand distinct types of retirement spending:
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Essential spending. Bills, living costs, care needs, which can be supported through taking advantage of predictable income strategies.
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Discretionary spending. Lifestyle goals such as travel, hobbies or family support, which can be covered by long-term investment approaches that provide both flexibility and confidence.
Using tools like cash flow modelling, advisers can show clients how much they can spend safely, helping to visualise sustainability rather than scarcity.
Certain structured income solutions can add predictability and reassurance, while blended strategies offer both security and growth potential.
In this way, advisers can guide clients from cautious preservation to confident participation in their own retirement.
Five ways advisers can support clients
How best can advisers help clients navigate their retirement spending, develop a spending plan and effectively shift their mindset?
This is as much an emotional transition as it is a financial exercise.
The following principles can be useful in supporting clients through this phase:
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Start early
Initiate discussions about attitudes to money long before retirement begins. It is not about forecasting; it is about understanding how clients feel about using their wealth. -
Frame spending positively
Position spending as a reward for discipline, not a risk to be managed. Linking withdrawals to milestones, like a special trip or supporting one’s family, helps clients see spending as purposeful and emotionally satisfying. -
Use structured income tools
Predictability builds confidence. Blending income-producing solutions with growth strategies provides a bulwark against uncertainty, while also building reserves for future expenses. -
Review estate implications
With pensions now part of the inheritance tax landscape, helping clients make timely drawdown and gifting decisions is critical. Advisers can simplify these choices, translating complex tax and estate considerations into emotionally meaningful decisions about legacy and life enjoyment. -
Stay adaptable
Retirement is not static. Circumstances, health and ambitions change. Advisers who maintain regular reviews and adapt strategies accordingly build lasting, trust-based relationships and help clients maintain a balance between financial prudence and personal fulfilment.
The shift from saver to spender is not simply financial: it is also psychological.
By reframing the conversation from, ‘Will I have enough?’ to, ‘How can I live well with what I have built?’, advisers can empower clients to see retirement not as an end but as the beginning of a rewarding new chapter.
Chris Hudson is the director of UK distribution at M&G