It’s a question that comes up regularly in conversations with retired clients.

On paper, everything appears to be in place. Work has ended or slowed, income streams are secure, and years of careful planning have provided financial comfort. Yet, despite this, spending can feel unexpectedly difficult. There is often a gap between financial security on paper and the confidence to use it in real life.

FORO – the fear that quietly shapes retirement behaviour

A significant driver of this hesitation is something increasingly described in research as FORO – Fear Of Running Out.

Recent findings show that a noticeable portion of older adults feel anxious about spending money in retirement and about the possibility of running out later in life. In a survey of over-55s, around 30% agreed that spending money made them anxious and a similar proportion said they often don’t spend on things they need because of that anxiety. This trend highlights how emotional reactions to money can influence behaviour long after work stops.

Similarly, over half of people aged over 55 report being worried that their retirement savings won’t last their lifetime – a concern that can underpin reluctance to draw down savings even when financial plans are solid.

These findings align closely with what advisers and planners see in practice: it is not unusual for individuals who are technically secure in retirement to experience emotional barriers to spending.

Retirees tend to spend income, not savings

Behavioural research into retirement spending reinforces this pattern of caution.

Work exploring how retirees fund consumption in retirement finds that households tend to spend much more from lifetime income sources – such as pensions, annuities or guaranteed income – than from accumulated savings or other wealth. This suggests that retirees may mentally treat income and savings differently, using secure income streams more readily and holding back on tapping into savings.

That distinction resonates with what we see in our clients’ behaviour: retirees often prioritise spending from income streams they perceive as “safe” while treating savings as something to preserve.

When good financial habits persist past their usefulness

For many, saving and caution were key to building the financial position they now hold. Those patterns of behaviour – reinforced over decades – don’t automatically switch off simply because work does.

The research on how retirees allocate spending illustrates this reluctance empirically: even when resources are available, the behavioural tendency is to under-draw from savings relative to lifetime income, pointing to a kind of financial mental accounting that favours preservation.

This same behavioural profile shows up routinely with clients: the very discipline that created comfort can later feel like a constraint.

Where the mindset shift actually happens

In practice, the shift tends not to come from more numbers or finer calculations.

What accompanies a change in behaviour is a shift in meaning and purpose attached to money.

Retirees who begin to engage more confidently with their savings often do so when financial decisions are anchored in clearly named life goals and supported by a sense of what money is for – rather than simply what it protects against.

That can include reframing savings as something that enables experience rather than something to be preserved indefinitely, and distinguishing between planned use of capital and uncontrolled depletion.

This reframing – rather than a change in balance sheet – is what tends to evolve behaviour over time.

The quieter risk of excessive caution

While FORO can feel protective, excessive restraint can carry its own cost.

Both research and real-world experience show that some retirees end up underspending relative to their means and later reflect that they delayed enjoyment unnecessarily – a dynamic that can mean missing opportunities that money was expressly saved for.

Porta’s Take

This question isn’t really about economics – it’s about psychology and purpose.

Being cautious with money during working life is often exactly what allows retirement security to be built. But once the income phase has ended, those same instincts can linger and suppress the very spending that money was intended to support.

What we see in practice is that confidence grows when retirement wealth is reframed from something to be preserved into something to be deployed with intention. The most meaningful shift is not numerical – it’s conceptual: viewing money as a tool for living, not just protection against fear.

The goal is not reckless spending. It is purposeful spending – spending that aligns with values, priorities and the life someone wants to live now.

Important information

This article provides general information only and does not constitute personal financial advice. The information is based on our understanding of current regulations, which may change in future. Decisions about your finances should always be made based on your individual circumstances. If you’re unsure about the suitability of any course of action, you should seek regulated financial advice.  The Financial Conduct Authority does not regulate tax planning, estate planning, trusts or wills.  The value of your investments can go down as well as up, so you could get back less than you invested.

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