As retirement becomes more flexible and personalised, a surprising challenge is emerging: many people find it hard to spend the money they’ve spent decades saving.
Fresh research from Aegon shows that UK adults’ associate anxiety (26%), fear (18%) and guilt (15%) with spending retirement savings. This compares to spending retirement savings associated with the positive emotions of excitement (15%), or security (17%) or relief (10%).
In the latest episode of Aegon’s podcast, Dan Haylett - financial planner and host of Humans vs Retirement - joins Dr. Tom Mathar, Head of Money:Mindshift at Aegon, to explore why spending in retirement can be so difficult, and how advisers can help support their clients through this transition.
“Clients often have more than enough to live well, but they still hesitate to spend,” says Haylett. “They’ve spent 30 or 40 years building the habit of saving. Flipping that switch - especially when it means drawing down capital that won’t be replaced - is emotionally challenging.”
Haylett suggests that spending is a skill, one that’s rarely taught or encouraged. “We’re nudged to save, but we’re not prepared for the transition into spending. That’s why so many people reach later life with regrets about what they didn’t do.”
He introduces the idea of a 'memory fund' - a way to reframe retirement spending as an investment in joy, connection, and legacy. He also encourages clients to consider sabbaticals and purposeful breaks earlier in life, not just after retirement.
Mathar added: “Advisers have a powerful opportunity here. By helping clients define what a good life looks like, and giving them the confidence to live it, financial advice becomes truly transformative.
“It’s a strange problem to have: to an economist, there’s no such thing as ‘saving’, only deferred spending. Yet many people, even those who’ve saved more than enough, struggle to spend.
“But when we understand the emotional complexity of modern life, it makes perfect sense. Never have we had to navigate such intricate trade-offs between our present selves and our future selves.
“Spending money shouldn’t feel like a problem, but for many, it is. And that’s why learning how to spend well is a skill worth nurturing.”
