Are you facing a retirement challenge?

With double digit inflation on the horizon, you may need to reassess your plans.

In May, a report from the Bank of England’s Monetary Policy Committee bleakly predicted “We expect inflation to rise to around 10% this year”. The Bank pins the blame on energy prices, the Ukraine war and supply chain issues. None of these has a clear end date, but the Bank expects inflation to be “close to our 2% target in around two years”. Whether or not their forecast proves correct, if you are close to, or about to, retire the immediate outlook is unsettling. So, what should you do?

The starting point is to do nothing until you have sought advice. Some aspects of retirement can be impossible to unscramble once set in motion. Your pension arrangements may state a specific retirement age but you may still also have choices.

Crunch the numbers

Your next step is to work out your likely expenditure and income in retirement. This needs to be a realistic assessment – a recent survey found that two fifths of 2021 retirees were already spending more than they had expected. We can help with the complex calculations using software that can handle assumptions about differing rates of inflation (considering the impending 10%) and investment returns. 

Identifying future income and spending patterns is vital in understanding what your options are. Cash flow analysis can show whether the level of investment risk that you are normally comfortable with is compatible with your retirement spending plans.

Bear in mind that at 65, average life expectancy is 20 years for men and 22 years for women. If the calculations suggest that you will outlive your retirement fund – a common concern for recent retirees – then you could consider revising your expenditure plans or accepting that at some point you will need to trade down to a smaller property or look at other options to extract value from your home. 

At the opposite end of the financing scale, the data might show all your needs can be met with an index-linked annuity, carrying no investment or duration risk. However, sadly that is unlikely as at current RPI-linked annuity rates the standard lifetime allowance of £1,073,100 will provide a monthly income of about £2,850 before tax.

In the worst case, a cashflow analysis may force you to consider deferring or phasing in your retirement. That may seem an unpalatable option, but it is better to be aware of the situation before your earnings have ended. A survey of 2022 retirees found that a fifth were retiring later than they had originally planned, with the main reason for the delay being not having saved enough. An extra period of work – whether full or part time – reduces the pressure on your retirement savings and may allow you to continue contributions rather than making withdrawals. 

For advice tailored to your circumstances, please contact us.


The value of pensions and investments and the income they produce can fall as well as rise. You may get back less than you invested.

Past performance is not a reliable indicator of future performance.

Investing in shares should be regarded as a long-term investment and should fit with your overall attitude to risk and financial circumstances.

Occupational pension schemes are regulated by The Pensions Regulator.

Equity Release will reduce the value of your estate and can affect your eligibility for means tested benefits.

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