Reaching retirement can feel like reaching the end of a long financial journey – and in many ways it is. But when it comes to your pension, retiring is really just the start of a new phase of planning. Once you begin drawing an income, the decisions you make about how much to take, and when, matter just as much as the decisions you made while you were saving. Get the balance wrong, and a pension that took decades to build could run dry sooner than you’d expect.
Most retirees are making these decisions without professional support
That’s not a hypothetical risk. The Financial Conduct Authority reported on 22 September 2025 that fewer than a third of people accessing their pension for the first time had taken regulated financial advice beforehand. And the consequences of going it alone can be significant: an FTAdviser article published on 5 March 2026 referenced survey findings suggesting that, at current withdrawal rates, many retirees could exhaust their pension in their late seventies – roughly nine years before their income is likely to be needed. The same survey found that one in seven retirees already regret how much they’ve withdrawn.
None of this means you need to be overly cautious with your pension. It simply highlights why a considered, regularly reviewed withdrawal strategy matters just as much in retirement as your investment strategy did during your working life.
Pension Freedoms gave you choice – and made you responsible for using it well
Since Pension Freedoms were introduced in 2015, defined contribution pensions – the type you and your employer built up together over your career – have offered far more flexibility than before. Rather than being steered towards a single option, you can now choose how and when to draw an income, mix and match approaches, or leave part of your pension invested for later.
That flexibility is valuable, but it shifts a lot of responsibility onto you. Without the structure that older pension rules used to provide, it becomes possible to draw too much too soon, or to make a decision – such as buying an annuity – that can’t easily be reversed, before you’ve properly weighed up the alternatives.
Six areas worth thinking through before – and during – retirement
1. How long might you actually need your pension to last?
It’s tempting to plan around ‘average’ life expectancy, but averages can be misleading. Office for National Statistics figures put average life expectancy for a 65-year-old woman at 88, and for a 65-year-old man at 85. Yet a quarter of 65-year-old women will live to 95, and a quarter of 65-year-old men will reach 92. If your withdrawal plan is only built around the average, there’s a reasonable chance it won’t stretch as far as you actually need it to.
2. Don’t underestimate what inflation will do over 20 or 30 years
Retirement income needs to keep pace with the cost of living for a long time, and inflation’s effect compounds more than most people expect. According to the Bank of England’s inflation calculator, an annual retirement income of £30,000 in 2015 would have needed to grow to more than £41,000 by the end of 2025 just to buy the same amount. It’s worth building inflation into your plan from the outset, rather than treating it as an afterthought once prices have already risen.
3. Work out what your guaranteed income actually covers
Most people can rely on the State Pension once they reach State Pension age, and some choose to convert part of their pension into an annuity for a further guaranteed income. Annuity rates vary depending on your circumstances and the wider market at the time you buy, and you can often choose options such as inflation-linked increases or continued payments to a partner if you die first. Because annuity purchases are usually permanent, it’s worth taking the time to establish whether one suits your needs before committing any of your pension to it.
4. Set a sustainable rate if you’re using drawdown
Flexi-access drawdown lets you take a variable income directly from your invested pension, adjusting the amount as your needs change – useful, since most people’s spending doesn’t stay flat throughout retirement. The key question is what withdrawal rate your pension can realistically sustain. A cashflow model, built with your financial planner, can help illustrate how different withdrawal rates might play out over time, including what happens if your spending rises in some years and falls in others. It’s a useful planning tool, though – like any projection – it can’t guarantee a particular outcome.
If you’d like to talk through your own pension and what a sustainable withdrawal strategy might look like for you, we’re always happy to have a no-obligation conversation.
5. Plan for the things you can’t predict
You can’t plan for every eventuality, but you can put yourself in a stronger position to handle one. Keeping a cash reserve for unexpected costs, such as a new boiler or a roof repair, means you’re less likely to need to sell invested assets at a poor time, or to draw down your pension more heavily than planned during a period when markets have fallen.
6. Make reviewing your plan part of the plan
A withdrawal strategy set at 65 won’t necessarily still be right at 75 or 85. Markets move, personal circumstances change, and the rules around pensions and tax are updated periodically. Sitting down with your financial planner on a regular basis gives you the chance to check your withdrawals are still sustainable and to make adjustments before a small issue becomes a bigger one.
Speak to us about managing your pension in retirement
We’ve worked with retirees across Poole, Bournemouth and the wider Dorset area for many years, helping them turn a pension pot into a retirement income that’s built to last. If you’d like to review your own withdrawal strategy, or simply want a second opinion on the plan you already have, get in touch to find out how we can help you make the most of what you’ve worked hard to build.
This article is for general information only and does not constitute advice. The information is aimed at individuals only.
All information is correct at the time of writing and is subject to change in the future.
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.
The Financial Conduct Authority does not regulate cashflow modelling.