Coaching the retirement mindset from saver to spender

Many clients enter retirement with a long-established mindset for accumulating wealth, but much less confidence about how to use it. The transition from accumulation to decumulation can be challenging because spending often feels fundamentally different from saving, even when a financial plan demonstrates it is affordable.

Retirement coach and author Dan Haylett explores why moving from saving to spending can be as much a behavioural challenge as a financial one. In the M&G-supported white paper The Skill of Spending in Retirement, he captures the question sitting beneath many retirement conversations simply as: “Am I allowed?”

Haylett distinguishes between what clients may be financially able to spend and what they feel comfortable spending. That gap can help explain why clients with sufficient assets may still underspend or hesitate to use the wealth they have built.

The paper also makes the case for a toolkit rather than a single solution, combining approaches such as guaranteed income, flexible drawdown and smoothed investments to address different financial and behavioural needs in retirement. 

More broadly, the challenge is not simply having enough. It is helping clients feel sufficiently comfortable to use their wealth.

Three common behavioural barriers 

• Fear of running out: Even with sufficient resources, clients may remain concerned about longevity, inflation, care costs and market volatility.
• Loss of identity: Retirement can create a sense of disconnection, particularly where identity and self-worth have been closely associated with work and earning.
• Regret risk: For some retirees, the greatest financial risk may not be running out of money but failing to use wealth in a way that supports their desired lifestyle, family objectives and legacy plans.
   

These concerns are reflected in M&G Investor Compass research*. Almost half of investors surveyed, 48%, reported moving into more defensive positions during market turbulence, while advisers identified loss aversion as the most common behavioural bias influencing client decisions, cited by 69%.

M&G Investor Compass* highlights the combined value of behavioural coaching and resilient portfolio construction during periods of uncertainty.

For clients approaching or in retirement, confidence may be supported by:

• clarity about future income;
• a plan for essential and discretionary spending;
• a framework for responding to market uncertainty; and
• a portfolio designed to support long-term objectives through different market conditions.
  
  

Only 6.5% of affluent advised investors surveyed felt unconfident in volatile markets, compared with 25% of non-advised investors. Advised investors were also around three times less likely to feel anxious and consider making changes when markets fell sharply. 

This is where advisers can add significant value. Behavioural conversations, supported by retirement cashflow modelling, can help clients see what their accumulated wealth could make possible rather than viewing every withdrawal as a loss.

The proposed changes could encourage some clients to use pension assets more actively to fund retirement, rather than preserving them primarily for inheritance.

Effective planning now requires advisers to balance retirement income needs, tax efficiency and legacy objectives.

Specifically, advisers can help clients consider the interaction between:

• retirement income requirements;
• available income tax bands;
• pension and non-pension assets;
• lifetime gifting;
• trusts and other estate-planning arrangements;
• anticipated care costs; and
• the client’s intended legacy.

Spending and legacy planning should not be treated automatically as competing objectives. The task is to establish what clients need for security, what they want to enjoy during their lifetime and what they still wish to pass on.

“For many years, advisers could plan out someone’s retirement in the knowledge they could ignore the pension when considering the wider IHT planning considerations. But upcoming changes to inheritance tax mean this will no longer be the case.

“With unused pension funds potentially generating five or six-figure IHT bills, advisers will need to help clients think differently and deal with the dual task of ensuring a comfortable retirement while maximising the wealth transferred to the client’s loved ones. There are many ways to mitigate IHT and advisers are best placed to find the options best suited to their clients’ circumstances.”

Les Cameron, Head of Technical at M&G

Women are increasingly central to retirement and legacy planning. They frequently inherit household assets after the death of a partner, while also controlling greater levels of wealth accumulated independently through careers, property ownership and investment.

Research from M&G, The Untapped Potential of Women’s Wealth,** found that 31% of women expect to inherit most of their partner’s wealth, compared with 17% of men.

However, inheritance and control do not necessarily create confidence:

• 53% of women say they will need advice to feel confident about managing an inheritance.
• 43% of women have discussed investing an inheritance with an adviser, compared with 69% of men.
• 49% of unadvised women feel uncomfortable discussing inheritance with their family.
• 50% of women believe resolving investment matters following a partner’s death would be challenging.
   

These figures point to more than a wealth-transfer opportunity. They suggest a confidence gap that could affect how women spend, gift and manage wealth throughout retirement.

Uncertainty about future living and care costs can reinforce a reluctance to use accumulated assets. The same research found that 42% of women said that not knowing how much wealth they would need to retain for living or care costs was their main barrier to passing wealth on, compared to 31% of men.

For advisers, the opportunity is to engage with women before a bereavement, inheritance or health event forces a decision. Early conversations can help clarify the balance between security, spending and legacy goals.

For many women, the challenge is not simply inheriting or accumulating wealth. It is feeling sufficiently confident to use that wealth during retirement while balancing future care needs, family support and legacy objectives. Helping clients navigate those competing priorities is becoming an increasingly important part of women's retirement planning.

With more than £73 billion in assets under management (as at June 30, 2026), PruFund combines:

• Active multi-asset management, drawing on long-term views of markets and economic conditions.
• Broad diversification, both across and within asset classes.
• Access to private markets and real assets, providing investment exposures that can be difficult for individual investors to access.
• An established smoothing process, designed to reduce the impact of short-term market movements on the investment journey.
   

This positions PruFund as more than a standalone smoothed investment. Its active management, investment breadth and different return drivers can allow it to complement traditional multi-asset strategies within an advised portfolio.

For clients moving from accumulation into income withdrawal, PruFund may help:

• Manage volatility and sequencing risk by reducing the need to sell units following sharp market falls.
• Support investor composure by helping clients remain invested during periods of uncertainty.
• Increase portfolio diversification through broad asset exposure, including private markets and real assets.
   

For clients who value emotional reassurance alongside financial outcomes, PruFund can therefore support spending confidence while offering something different from a conventional multi-asset portfolio.

There is no single retirement income strategy that works for every client. However, many advisers build retirement plans around three core principles: securing essential expenditure, maintaining flexibility for discretionary spending, and maintaining a long-term investment strategy capable of supporting future income needs.

For clients seeking predictable income without committing to a lifetime annuity, the Prudential Guaranteed Income Plan offers a flexible, time-bound solution backed by the Prudential With-Profits Fund.

Key features include:

• guaranteed income for a term of five to 15 years;
• a minimum investment of £10,000;
• options for an income, a guaranteed lump sum at the end of the term, or a combination of both; and
• the ability to form part of a broader retirement strategy alongside PruFund or other assets.
   

The plan may be relevant for clients who want predictable income during the early years of retirement. By supporting essential expenditure through dependable income, advisers can help clients create greater clarity and confidence around retirement spending decisions.

Used alongside invested assets such as PruFund, the Prudential Guaranteed Income Plan can form part of a broader retirement income strategy, providing guaranteed income for a defined period while other assets remain invested for longer-term needs.

The value of your investment can go down as well as up, so you might not get back the amount you put in.