Quick Answer
With increasing life expectancy, many people will spend 20–30 years in retirement. Making your pension last is one of the key challenges of financial planning for over-50s.The 4% RuleA widely-used guideline suggests withdrawing no more than 4% of your pension pot per year, ...
Key Information
- Last Updated:
- 31 Oct 2026
- Category:
- Pension Planning
- Reading Time:
- 1 min read
With increasing life expectancy, many people will spend 20–30 years in retirement. Making your pension last is one of the key challenges of financial planning for over-50s.
The 4% Rule
A widely-used guideline suggests withdrawing no more than 4% of your pension pot per year, adjusting for inflation. On a £200,000 pot, this means £8,000 per year. Combined with the full State Pension (£11,502), this gives £19,502 per year.
Practical Strategies
- Delay State Pension — each year of deferral adds approximately 5.8% to your weekly amount
- Reduce drawdown in down years — avoid selling investments when markets are low
- Keep 2 years’ expenses in cash — prevents forced selling during market downturns
- Review spending regularly — most people spend less as they age (travel less, eat less)
Self-employed? Visit Self Employed Money for UK tax guides and financial tips for freelancers.
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