How to avoid these three common retirement regrets

If you could have a conversation with yourself 20 years ago, what advice would you give?

You might tell your younger self to worry less and enjoy life more, or to go after opportunities that mean something to you. In any case, you would probably use the conversation to right any wrongs you can identify in hindsight.

Looking 20 years into the future, you might expect to be well into your retirement by then.

And of course, you likely want to progress through retirement without regrets – but according to Canada Life, around 40% of retired Brits regret not doing things differently.

So, in order to avoid wishing you could give key advice to your younger self once you’re already retired, keep reading to learn three common retirement regrets and how to evade them.

1. 17% of retirees would save more into their pension during their career

Your career years are an extremely busy time. Enjoying life at every stage are part and parcel of these years – yet one thing people often leave by the wayside is saving for retirement.

When you’re young, retirement seems like a lifetime away, so it’s no wonder that many people in their 20s and 30s leave pension savings for later, or only save the minimum.

However, a report from FTAdviser reveals that many over-40s don’t have a pension either as only 63% of women and 80% of men in this age bracket have pension savings.

Yet according to the UK’s retirees, not saving more into their pension is one of the biggest regrets they hold.

Upping pension contributions could be even more important in 2024 than it was five or so years ago. This is because the cost of a comfortable retirement has gone up to £43,100 a year for a single person or £59,000 for a couple amid the cost of living crisis, the BBC reports.

Remember that your pension pot is likely to form the majority of your income in retirement. If you aren’t on track to meet your retirement goals now, it may be worth reviewing your pension contributions and increasing them if you can.

The pension Annual Allowance (AA) – the amount you can usually contribute into your pension each year without incurring a tax charge – is very generous. As of the 2024/25 tax year, it stands at £60,000, or 100% of your earnings if lower, for most earners. An annual allowance charge is imposed if the AA is exceeded, this is different to contributing over earnings, and not being eligible for tax relief. The maximum contribution which can be made and tax relief obtained is the lower of AA and earnings or £3600 if no earnings.

As such, there are plenty of tax-efficient opportunities for you to save into your pension during your working life, helping you to avoid financial regret when you reach retirement.

2. 1 in 8 retirees regret not adjusting their lifestyle to save for retirement

 During your working life, it’s likely that you are focused on pursuing meaningful experiences – be it treating your family to an amazing holiday abroad or working hard to afford a bigger, more luxurious home.

However, Canada Life’s research revealed that 1 in 8 retirees regret not adjusting their lifestyle to save for retirement.

As you may already have experienced throughout your life, some goals require sacrifices. And whilst it’s crucial to live life to the full and enjoy the present, make sure your lifestyle is suitable not just for the here and now but for the long term too.

Some practical steps to help you discover whether your lifestyle is sustainable are:

• Work out how much income you’re set to have in retirement if you keep saving at your current rate (a Financial Planner can help you with this).
• Compare this to your current income.
• Calculate the difference between them, and look at how much you’d have to cut back on if your retirement income is much less than your current earnings.
• Consider rerouting more of your income into your pension and cutting back on unnecessary spending in order to ensure you’re living a sustainable lifestyle.

Thinking carefully about retirement now could prompt you to live a more realistic lifestyle – one you can make last for many years, not just whilst you’re working.

3. 1 in 12 retired people would retire later if they had their time again

This one might surprise you: 1 in 12 retirees said that they would retire later in life if they could do it all over again. While this is a small number, it’s interesting that many people regret not staying in work for longer.

Although early retirement is an important goal for many people, make sure you look beyond this aspiration and think carefully about how long your pension and other savings will need to last.

Using our earlier example – a couple who needs £59,000 a year for a comfortable retirement – this means that retiring even five years early may require you and your spouse to save an additional £295,000.

This figure might put your early retirement goals into perspective and prompt you to form a realistic, sustainable retirement plan that suits your situation.

Of course, there is nothing wrong with aiming to retire early. If this is your main goal, we can work with you to help make it a reality.

However, knowing that some retirees regret their decision to retire early, and the additional savings you may need to do so, might allow you to take on another perspective.

There could also be an emotional aspect to retiring later too – work may provide you with a routine, social life, and sense of purpose. It could also help to consider your emotional wellbeing in choosing when to retire, not just your finances.

Work with a Financial Planner to create a bespoke retirement plan that suits your needs

Here at PenLife, we’re all about doing what works for you. Whatever your retirement goals, and however much preparation you have already done, we will support you to create a plan that gives you ultimate peace of mind.

To create a retirement plan that works for you, email us at enquiries@pen-life.co.uk, or call 01904 661140.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only. All information is correct at the time of writing and is subject to change in the future.

All contents are based on our understanding of HMRC legislation, which is subject to change.

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.

Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation, and regulation, which are subject to change in the future.