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A fifth (20 per cent) of Brits over 55 have consistently spent more than they had expected to during retirement so far, with an additional 11 per cent saying this occurred during early retirement, analysis from PensionBee has found.
The research revealed that the largest financial burden for retirees was daily living expenses, with 28 per cent citing this as their top reason for expenditure.
PensionBee suggested that this may be attributed to the rising cost of living in the UK since 2022.
Meanwhile, 21 per cent of retirees said their biggest financial commitment was housing costs, including mortgage payments and general property maintenance.
PensionBee also surveyed pre-retirees (aged 18 to 54) about what they anticipate will be their largest expense in retirement.
The most common concern of savers aged 18 to 44 was housing costs (28 per cent), reflecting worries over rising property prices in the UK.
In addition to this, 19 per cent of young savers aged between 18 and 24 believe they will need to use their retirement savings to support their families, for instance for a house deposit.
However, a fifth (20 per cent) of pre-retirees aged 18 to 54 expect care costs to be a significant financial burden in retirement.
Commenting on the research, PensionBee’s director of public affairs, Becky O’Connor, said: “Overspending in retirement is a real risk. It can be hard to know how much you are likely to spend.
“With living and home maintenance costs often exceeding expectations, a significant chunk of today’s retirees are overspending.
“There are other areas of spending, such as helping out younger family members, that could become even more demanding on pension pots over the coming years, so the next crop of retirees may find they are stretched even further beyond their expectations.”
O’Connor said the survey data suggests that when retirement planning, assuming savers will overspend beyond the budget they initially set could be a “wise way to minimise any nasty surprises”.
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