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Almost four in ten affluent women (38%) approaching retirement are unsure how to turn their pensions and investments into a regular retirement income, compared with around one in five men (19%), according to new research from Rathbones, one of the UK's leading wealth and asset management firms.
The research, based on a survey of more than 2,000 affluent UK adults with investable assets of £250,000+*, highlights what Rathbones is calling the "Great Decumulation Challenge": the transition from building wealth throughout working life to spending it confidently in retirement.
Despite having accumulated significant wealth, many affluent investors remain uncertain about whether they can achieve the retirement they want. More than a third of women (35%) do not believe their retirement income will allow them to live well, compared with 22% of men, revealing a pronounced gender confidence gap among investors with similar levels of wealth.
The findings suggest that accumulating wealth is only part of the retirement challenge. Many investors remain unsure about how much they can afford to spend, how long their wealth needs to last, and how to balance enjoying retirement with preserving financial security for the future.
Almost half (47%) of affluent investors have not taken formal financial advice about retirement, suggesting many are navigating these complex decisions alone.
Camilla Stowell, Chief Executive Officer of Wealth at Rathbones, says: "The mental shift from spending years building a retirement nest egg to drawing on that wealth to generate a sustainable income that could last 20, 30 or even 40 years can feel like a leap of faith. Individuals are increasingly responsible for making complex decisions around pension drawdown, investment risk, tax planning and longevity, increasingly without the certainty previous generations enjoyed from defined benefit pension schemes, which guaranteed an income.
"Our research suggests women are finding this transition particularly challenging. In our conversations with clients, we regularly hear concerns about making the wrong decisions, withdrawing too much too soon, or being overly cautious and depriving themselves of experiences they can comfortably afford. Striking the right balance between enjoying retirement today and preserving financial security for tomorrow is one of the biggest financial challenges many retirees face."
The research reveals a broader gender divide across several key retirement planning measures. Among those who have not yet retired:
- 34% of women do not believe they are on track to achieve the retirement they want, compared with 20% of men.
- 32% of women do not have a clear idea of how much income they will need in retirement, compared with 20% of men.
Fear of running out of money outweighs lifestyle ambitions
The research suggests that, even among affluent households, concerns about financial security often outweigh aspirations for the lifestyle retirement can provide.
Half (50%) of affluent investors rank feeling financially secure among their top three retirement priorities, compared with 38% who prioritise maintaining their desired lifestyle, including travel, hobbies and discretionary spending.
The findings highlight a common challenge among retirees: worrying about running out of money can make it difficult to spend with confidence, even when financial circumstances permit it.
Camilla Stowell adds: "For many people, the fear of running out of money is greater than the desire to spend it, even among the affluent. Our research shows that wealth alone does not always create confidence, and that anxiety is particularly pronounced among women.
"Retirement should be about enjoying the freedom that wealth can provide. Yet many people struggle to make the shift from accumulating wealth to using it confidently. Effective planning and advice can provide the reassurance needed to spend with confidence while maintaining long-term financial security."
The research also points to an opportunity for financial advice to help close the confidence gap. More than half (53%) of respondents have sought formal financial advice about retirement, with peace of mind, understanding what to plan for, and knowing what income they are on track to receive cited among the biggest benefits.
