Savers expecting that they will spend less by the time they are in their eighties could be underestimating how much they need in their pension pot by nearly 30 per cent. Many people expect their retirement spending to shrink as their activity levels decrease — that while the early years of their retirement may be filled with holidays and days out, this will become less regular the older they get.
However, research from the Institute of Fiscal Studies (IFS) contradicts this belief. On average retired people’s spending increased to a small degree throughout their sixties and seventies, and declined only slightly once they were in their eighties. The IFS recommends that savers plan for fairly steady spending throughout retirement. “If these spending patterns are a
