Most people approaching retirement aren’t doing everything wrong. In fact, most are doing a great deal right. They’ve saved consistently, paid into a workplace pension, and started thinking seriously about the future. But even careful, sensible people can fall into a handful of patterns that quietly undermine their plans.
None of the retirement planning mistakes below are catastrophic in isolation. But left unaddressed, they compound. The good news is that each one is fixable (and often more easily than you’d expect).
Mistake 1: Underestimating How Long Retirement Actually Lasts
Ask most people how long they expect to be retired, and they’ll say something like “fifteen years, maybe twenty.” In reality, a 60-year-old in reasonable health today has a realistic chance of living into their late eighties or beyond. For couples, the odds of at least one partner reaching 90 are higher still.
This matters enormously for planning. A retirement that lasts 30 years is a fundamentally different financial challenge to one that lasts 15. Income needs to stretch further, investment portfolios need to remain growth-oriented for longer, and the risk of running short of money later in life, when you’re least able to address it, becomes very real.
A practical example: James retires at 63 with a pension pot of £320,000. Assuming a 20-year retirement, he calculates he can draw around £16,000 a year from his pension (on top of the State Pension). But if he lives to 90, that’s 27 years — and his pot, without any growth assumptions, would run out around age 83.
Suggested next step: Build your income plan around a longer time horizon than feels comfortable. If you’re in good health at 60, planning to age 90 is not pessimistic — it’s prudent. Check your average life expectancy using the ONS calculator. A cash flow model that projects your income and expenditure across different longevity scenarios is one of the most clarifying tools available.
Mistake 2: Ignoring the Eroding Effect of Inflation
A retirement income that feels comfortable today will buy meaningfully less in ten years if inflation is not factored in. At 3% inflation (broadly the long-run UK average) the purchasing power of a fixed income halves in around 24 years.
This is a particular risk for anyone drawing a fixed annuity income, or holding too much of their retirement wealth in cash. Both can feel safe. Neither keeps pace with rising costs over time.
A practical example: Sarah retires with a fixed income of £28,000 a year and feels financially secure. Ten years later, if inflation has averaged 3%, she would need around £37,600 a year to maintain the same lifestyle. Her income hasn’t changed. In real terms, she’s significantly worse off.
Suggested next step: Ensure at least a portion of your retirement income is inflation-linked or drawn from assets with the potential to grow over time. Review your withdrawal strategy regularly, not just once at retirement. Even modest growth above inflation can make a significant difference over a 25-year retirement.
Mistake 3: Relying Solely on the State Pension
The full new State Pension in 2024/25 pays £11,502 a year (around £221 a week). For the majority of people, this covers essential costs but leaves very little room for anything else. Relying on it as your primary or only source of retirement income is one of the most common — and most consequential — planning oversights.
It’s also worth noting that not everyone receives the full amount. Your entitlement depends on your National Insurance record, and gaps from periods of self-employment, caring responsibilities, or time abroad can reduce it. Many people are surprised when they check their State Pension forecast for the first time.
A practical example: David has spent much of his career self-employed and has made irregular National Insurance contributions. He assumes he’ll receive the full State Pension. When he checks his forecast at 58, he discovers he’s on track for £9,200 a year — and would need several more qualifying years to reach the full amount.
Suggested next step: Check your State Pension forecast now at gov.uk, using your Government Gateway login. If there are gaps in your National Insurance record, it may be cost-effective to fill them with voluntary contributions. In many cases, the payback period is just a few years. Don’t leave this until the year before you retire.
Mistake 4: Setting Up a Pension and Never Looking at It Again
Pensions are long-term investments, and it can feel logical to take a “set and forget” approach. The problem is that the fund choices, contribution levels, and investment strategy that made sense at 35 may be entirely wrong at 55. Pension funds drift. Contributions that felt adequate a decade ago may have fallen behind. Default funds, which many workplace pensions use, are designed to be broadly suitable, not specifically suitable for you.
A practical example: Helen has been in the same workplace pension scheme for 18 years. She’s never changed her fund selection and contributes the minimum required to receive her employer’s match. At 54, she finally reviews her pension and discovers her pot is invested in a highly cautious fund that has significantly underperformed a balanced growth fund over the same period. That gap is worth tens of thousands of pounds.
Suggested next step: Review your pension at least every two to three years. Check your fund performance, your contribution level, and whether your investment strategy still matches your timeline and attitude to risk. If you have multiple pensions from previous employers, tracking them down and consolidating them (where appropriate) can simplify planning considerably.
Mistake 5: Going It Alone When the Stakes Are High
Retirement is one of the most significant financial transitions you’ll ever make. The decisions you take in the five years before and the first five years after you stop working have a disproportionate impact on how the next 25 to 30 years unfold. Yet many people make these decisions without any external input. That’s not because they’re complacent, but because they’re unsure where to find trustworthy guidance, or assume it will be expensive.
Good retirement planning guidance isn’t just about selecting the right funds. It’s about the sequencing of withdrawals, tax efficiency, protection planning, State Pension optimisation, and building a plan that adapts as your life changes. The value of getting this right, and avoiding the errors that compound quietly over time, is substantial.
A practical example: Richard and Linda are both 59 and planning to retire at 63. They have a combined pension pot of £680,000, two ISAs, and a small General Investment Account. Without guidance, they plan to draw their pensions first. A straightforward review reveals that drawing their GIA first, then their ISAs, and using their pensions last would meaningfully reduce their tax bill over a 25-year retirement — potentially worth tens of thousands of pounds.
Suggested next step: You don’t need to hand over control of your finances to benefit from professional guidance. A single structured conversation with a qualified financial planner at the right point in your planning journey can surface issues, opportunities, and clarity that years of self-research may not.
Not sure whether any of these mistakes apply to your situation? Our free Retirement Readiness Check takes around five minutes and gives you a personalised score across the areas that matter most — pension awareness, income planning, tax efficiency, and more.
Remember: RetirementAdviser.UK is an educational resource supported by professional financial advisers. It does not provide regulated financial advice. For personalised recommendations, please speak with a qualified financial planner.
Up next: “How much do I need to retire comfortably?“
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