How to turn your dream retirement into reality

James Rowe: Dreaming of retirement can bring to mind ideas of a steadier pace of life, more time for hobbies and relaxing trips abroad. Or perhaps it conjures up the thought of caring for your spouse, looking after your grandchildren or not having enough money to see you through. But what's it like in reality once you reach life after work? Let's discuss that on this episode of Which? Money.

Hello, it's James in the Which? studio alongside Which? researcher Holly Lanyon. Holly, hello.

Holly Lanyon: Hi, James. How are you?

James Rowe: I'm very good, thanks. How are you?

Holly Lanyon: Yeah, all good, thank you.

James Rowe: Very good. Now, Retirement Dreams Versus Reality, that is in fact the name of the piece you wrote for the latest Which? Money magazine. We often talk about preparing for retirement, how much money we need, but you've been looking at what retirement actually looks like compared to what we might envisage it looking like. What have you been doing?

Holly Lanyon: Yeah, exactly. Like you say, we do a lot of research and advice about how to prepare for retirement, but for this piece, yeah, we really wanted to hear from retirees about what's life like when you get there and how does it differ from your expectations? So we did one survey with the general public – so with retired UK adults – asking them how really does life in retirement live up to your expectations in various different ways. And then separately as well, I spoke to Which? members who told us in their own words about their experiences and how life in retirement has shaped up.

James Rowe: And how interesting was it for you to do this? Because you do cover retirement a lot here at Which?, and I guess for a lot of it, it's about that preparation, how much money you're going to need and that kind of thing. But just to actually speak to people and get a sense of what it actually looks like, how interesting was that for you?

Holly Lanyon: Yeah, it was fantastic. Some of the conversations that I had with members were – I think the biggest shift in my thinking was speaking to one member who was like, I was mainly coming at it as thinking about this shift from that first moment of retiring in terms of not working. But she was like, actually, there are so many transitions that you are approaching – yeah, you've got lots of different phases that bring many different transitions, be it adjusting to not working, adjusting to changes in your health or the health of those around you, leaving the place that you've lived for 50 years to be closer to family members. So, yeah, that was a really useful shift in my thinking. And, yeah, lots of the conversations I had with members were really reflective, really insightful.

James Rowe: And it's not just you who's been speaking to members. I had a chat with somebody who's retired, somebody who contributed to your piece as well. We'll be hearing from Stuart – that's his name. We'll be chatting to Stuart a little bit later on. But do you want to just give us some numbers? I don't want to necessarily break all these people down that you spoke to purely into numbers, but you are a researcher, so you have managed to get some numbers out of this. And there's one headline stat that really jumped out to me. I wonder if it's the same one as it was for you around – it's the 40% number. Do you want to tell us what the stat actually is?

Holly Lanyon: Yeah, so one of the questions that we asked retired UK adults when we surveyed them was basically overall, how does your lifestyle in retirement compare to your expectations? And four in ten said it differed in some way. But they didn't all say that it differed in the same way, so a quarter said their life in retirement is better than they expected, but one in six said it's worse. And then separately speaking to Which? members, you get a sense of all the many different ways in which life in retirement might be different than you expect or take a different course.

James Rowe: And what kind of things are we looking at then? So if 40% are saying that it differs from what they expected, that is sizeable and probably more than I was expecting it to be. What kind of things do differ to what they expected? What were the members telling you?

Holly Lanyon: A whole range of things. There were people who had taken up really surprising and exciting interests. So there was somebody who I think has said, "Yeah, I've started mapping all of the gravestones in a cemetery, and it's absolutely fantastic."

James Rowe: Fascinating.

Holly Lanyon: A lot of people who said, "Now I've got time to do things that I always wanted to, but haven't," be that ballet or starting a pottery studio. But then also, many more of the practical and emotional aspects of life. So, I guess we'll come on to that, financial security obviously playing a big role in how you experience retirement and what your life in retirement looks like.
It's also a time when many people's caring responsibilities change, likewise changes in health. This was something also that came out when I was researching the piece, is you ask people what's life in retirement like, but life in retirement can be as varied as life in any other stage of your life. So there was a lot of themes that came out of the research.

James Rowe: Yeah, I almost think that a lot of us just have this grand idea about what retirement might look like – just total freedom, you can do what you want. But as you mentioned there, maybe around caring responsibilities – what's the number? 20% of people you spoke to said they spend more time caring than they expected. And that can be for childcare as well, right?

Holly Lanyon: Yeah, so the most recent government figures show that grandparents are the most common providers of informal childcare. So I think it's a time obviously where a lot of people will start providing more childcare for grandchildren. But also more time for, like you say, your spouse, other friends, other family members.
So, yeah, speaking to members as well, we heard from people who – some of whom retired early specifically to have more time to care for loved ones, but also people whose loved ones had become ill unexpectedly during the course of their retirement and that had become a big part of their life. Many of the people I spoke to did say, "I'm really grateful to have the time to do this," but at the same time, recognising the significant responsibility it is and the extent to which it changes your plans and your ideas of what you might have been doing in retirement.

James Rowe: And you mentioned this sort of emotional aspect of retirement as well. Again, it's not necessarily something that we would probably think of, especially when something unexpected or sudden happens as well. I was looking at the magazine piece that you wrote, and there was one member where their partner died unexpectedly in the same month that they retired – which just shows just how unexpected something can be at a time where this member was probably looking forward to – as I said before, a new-found freedom or just to discover what this phase of life would be like. But then something like this can come along and just totally throw all those plans out the window.

Holly Lanyon: And that was something that that member said is, "You can plan for your retirement all you like, and it is good to have a vision of what you expect that to be, but be prepared that things can change and it might not turn out as you hoped." And she said as well, the transition to stop working – that was something that also a lot of other people said – the transition to stop working is kind of one big emotional adjustment, and that alongside obviously the bereavement, I think, has been really, really difficult.

James Rowe: And on that transition from work – and for a lot of people full-time work – to no work at all, how do people adjust to that? What did the members tell you?

Holly Lanyon: So when we surveyed retired adults – so not Which? members, this is general public – half actually said they missed work less than they expected. But then we asked another related question about how has retirement impacted your sense of purpose and identity more broadly. And there, people were more split. So one in five said it's better – retirement's had a good impact on that – but a similar proportion said it was worse.
And then speaking to members separately, multiple people did say, especially at the beginning, the sudden shift to not working left them feeling really out of the loop. I think, especially if work for many people plays such a big role in – it provides a lot of structure, it provides a lot of meaning, it provides a sense of accomplishment. And for some people, they said losing that – someone described it as going like the sudden death route, just losing that from day one of retirement – took a little while to get used to.

James Rowe: And it is that pace of change for people that can feel a bit alien. You spoke to a Which? member called Stuart Anderson for your piece, and a little bit earlier on, I sat down with him as well to ask him more about his retirement. Now, Stuart used to be a service engineer, repairing X-ray and CT equipment in hospitals, and did that for two decades before retiring just last year. We'll be back with Holly in just a moment, but here is my chat with Stuart, where I started by asking him how he found the transition from a busy job to retirement.

Stuart Anderson: That hit me quite hard. I didn't anticipate it. And I've not actually been able to put my finger on how you feel other than just empty. It's almost an unconscious reaction. I just slept for a ridiculous amount of time, and I couldn't quite work out why. And it was in fact not until I spoke to Holly about this article that she said, "Yeah, what you've done, it's the reward – it's the intrinsic reward function that's missing, that's gone from your life." Get up every morning, go to work, you do a really important job, you get it done, brilliant, come home – and that's gone from your life. Suddenly, you're just left with your own environment.
I believed when I went into retirement that I would be setting myself a daily routine or a weekly routine. These days, I'd get up in the morning at 8:00 and I'd be working in the garage by 9:00 making things and doing stuff, and it just didn't happen.

James Rowe: Did you look forward to retirement – in the weeks or months or even a few years when you knew you were going to retire, did you look forward to it?

Stuart Anderson: Yes, in some ways. Yes, I thought, it'll be great to be able to get up when I want and do the stuff around the house. Plenty of hobbies, I wasn't short of anything to do. There's a recommendation that before you retire, start to work on things that you're planning to do afterwards. So perhaps think about doing some volunteering, or if you want to do a part-time job. My wife and I both retired at the same time, and we both had something lined up to do. Hopefully that went some way to helping. It did make a difference.

But now we're nine months down the line since retirement, and it's transformed. So now, much more relaxed, much happier, comfortable with day-to-day activities. More stuff has kicked in on the volunteer side, I'm doing more stuff around the house. And you have that understanding that if you're going to have a day off, you can have a day off. If you don't feel like doing anything, you don't have to do anything.

I think when you do retire, you've got this sudden thinking, "Right, that's it. I'm a used husk." There's nothing left for me now, it's just descent into decrepitude. And that hits you. It does. It comes from nowhere, and you think, "Right, that's it. Not useful anymore."

James Rowe: Can I ask you about the cost? Did you think much about it? Did you have a fully formed idea about what your finances would look like?

Stuart Anderson: Yes, so approaching retirement, there's an awful lot of information and advice available about finances during retirement. So plenty of information there. And we'd planned for it, we'd taken financial advice a number of years ago, which actually turned out to be a good thing. I'd always thought that I could work out what I needed to do with my money and pensions. But taking professional advice made a big difference, and we now know what our budget will need to be and how we look after that money we do have saved. So monetarily, we were quite happy with entering retirement.

James Rowe: What about your finances now? Do you spend a lot of time managing your finances or having to think about them more than you expected to?

Stuart Anderson: I've just had a three-quarter of an hour conversation with my wealth manager, as he calls himself. I've worked for a number of different employers through my life, and each one has set up a pension. So the grand idea of carrying one pension through your life never worked. And so the last company I was with offered access to financial advice for a while, and we ended up engaging a wealth manager. And he's pulled all the pensions together that needed to be pulled together, he's looked after the ones and said, "No, you look after those because there are benefits for you in keeping that pension personally." And all in all, we're on a much more stable financial footing than we would have been without that professional help.

A friend of mine put it a simple way, he said, "If he makes you £10,000 and costs you £3,000, you're £7,000 better off." Because you talk to your mates in the pub and they say, "Don't go there, they want to charge me £3,000 for looking after my money." Once you get over that, once you realise that somebody can do that for you, that's taken a great weight off our shoulders as well, actually. So that has helped too, coming into retirement. We're fortunate that we do have a quite healthy financial position, and I know some people aren't and don't have that luxury. But even then, I would say the professionals probably can make a better job of it than you can.

James Rowe: I think a lot of people spend – especially now – spend a lot of time maybe worrying about retirement, worrying about the finances that they'll have for retirement. During your career, do you have any regrets about retirement planning or anything that still niggles away?

Stuart Anderson: Regrets? No, I think I was always a bit aware of the fact that I was racking up a number of pensions from different organisations and that at some point they would need to be accumulated into one fund. Doing that was a little bit intimidating, and that's where professional help assisted on that. The simple answer is, yes, put more money in earlier in your life if you can. I know it's difficult because there are lots of demands when you're younger, but putting a bit away regularly is probably the best way. Hide it in a regular payment. If you can up the bit that you pay via your salary so you don't even see it, maximise that.

James Rowe: What about any other words of encouragement for anybody who is not yet retired, no matter where they are in their career? You've mentioned about saving earlier, and people closer to retirement putting some more plans in, but any other words of encouragement?

Stuart Anderson: Yeah, it's actually fun! Retirement is actually great when you get there. So the transition from work life to retirement can be easy or it could be a little bit tricky, but once you've got through that, yeah, it's great. So it will be fine. Do get yourself a secure financial position.
We did as much as we could to the house as well before we retired, so we were getting our regular income, so that was all dealt with. So now the house is sorted, pension sorted, and we're relaxed. So it's good, yes, once you actually get here and come to terms with a different approach, different way of life. It's good fun, yeah. Enjoy it.

James Rowe: Thanks again to Stuart there for his time, for giving us a bit of an idea about how he has navigated that route from full-time work to retirement alongside of his wife. Holly is still with us. You spoke to him as well, in fact he mentioned your chat with him in the chat we've just heard. Your reflections on your chat with him?

Holly Lanyon: Yeah, really enjoyed speaking with Stuart. We had a really insightful chat, and he actually inspired me to do another little spin-off piece of research. One of the things he said when we spoke was that he was like, "I'd really not recommend retiring late in the year, because especially that first winter in retirement," he said he just found it really long and really difficult.

So I did a separate survey with retired Which? Connect members and asked them, "When did you retire and would you recommend someone else doing the same?" And found that actually, yeah, nearly two-thirds of those who retired in the spring would recommend it, and half of those who retired in the summer would say, "Yeah, I'd recommend doing so." But only a third of those that retired in the autumn or the winter would recommend it.

So, obviously, when's best to retire – you shouldn't plan your whole retirement around that, there's going to be financial and things related to your job that might have a bigger impact, but all else being equal, if you've got the freedom and flexibility to do it, worth considering which time of year will best help you adjust to your new rhythm and routine.

James Rowe: We did talk about finances there, and I guess that comes into one of these things that you may think about as you prepare for retirement, no matter what your age, whether you're just a few years or many a year away from retirement. And I guess this was something that a lot of the Which? members, they almost tried to hammer home about considering how much you have and maybe how much time you're going to end up thinking about finances when you've retired as well.

Holly Lanyon: Yeah, so in the survey of retirees, one in five said that managing the cost of retirement is harder than they expected. And I guess there's a few aspects to that. Obviously costs have been rising across the board recently, and that's no different whether or not you're retired. And also the type of pension that you have. Lots of the Which? members we spoke to separately said, "I feel really lucky to be of the generation that have a defined-benefit pension" – so the type of pension that provides an income for life.

James Rowe: Which is very different to the defined-contribution pension that most of us have now.

Holly Lanyon: Exactly, exactly. And with a defined-contribution pension, it's much more responsibility on you to work out how much you're going to need in retirement to try and save enough to get there, and then when you get to retirement to decide how to turn that pension pot into an income. And yeah, one member said, "Yeah, I didn't realise how different all these options were, and felt quite frustrated about the amount of work that it involved."
We also asked the retirees about financial planning, and six in ten said they wish they'd known more about at least one aspect of financial retirement planning. Top of the list was how much to save, so yeah, that kind of speaks to exactly what we were just saying. If you've got a defined-contribution pension, you're going to have to make some calculations about how much you'll need and how to save for it. But also people wanted to know how much state pension they would get and how retirement income would be taxed.

James Rowe: So there's a lot there about finances, isn't there? And six in ten wish they knew more about financial planning. And I think this just highlights, I guess, how little we actually think about finances on a grander scale throughout our life. And with financial planning, we might end up there thinking about a financial adviser, which is something that Stuart mentioned when we heard from him a little bit earlier. And at any other time in your life, you may not even think about a financial adviser because you don't have the finances to necessitate needing one. But when you come to retirement, seemingly there's a lot of people who just feel a bit lost about the amount of options or trying to decide what to actually do with the money.

Holly Lanyon: Yeah, and I think it's important to understand your options and where to get support with those decisions. So yeah, like you were saying, there's the option of getting financial advice. Obviously that's got costs associated with it. There's free guidance available, so I think anyone over the age of 50 can get broader and general guidance about their options from a government-backed service, MoneyHelper.

Then there'll be information from your employer and your pension provider. Did hear from a lot of members actually that some employers run pre-retirement courses that will be a mix of the financial aspect, but also helping you warm up to the idea of not working more emotionally. And a couple of people who'd done those said they'd really recommend it. So worth speaking to your employer and seeing what is on offer if there is support they can offer in that regard as well. But yeah, really important to understand your options for support and where to find it.

James Rowe: And, of course, we've got plenty of guidance on our own website as well, don't we, for planning for retirement?

Holly Lanyon: Yeah, so we've got a whole pensions and retirement hub where you can find loads of really useful guidance, especially around these aspects where people were saying they wish they'd known more. So we've got a guide about how much you'll need to retire, we've got calculators you can use to work out how much your retirement income will be taxed, as well as a lot of news stories.

James Rowe: Another thing that some of the retirees were telling you about was finding time maybe before retirement exploring what they can actually do in their spare time. Four in ten said they had more time than they expected, more free time than they expected. A lot of them said try and consider what you're actually going to do with your time rather than just getting there and end up twiddling your thumbs, really.

Holly Lanyon: Yeah, exactly. I think that's a really easy, practical bit of advice is try some things out beforehand. One of the members I spoke to was like, "It takes a while to find the things that really speak to you and that excite you and stretch you." She now had a really busy life in retirement of doing a lot of work with an adult literacy charity, but also doing pottery, which again was something that she'd never had the opportunity to do when she was younger. And actually in retirement, now she had that free time, explored it and really loved it.

Lots of people that we spoke to as well mentioned University of the Third Age, so they have groups – I think there's like a thousand groups across the country – and they're all peer-led learning basically for anyone who's not in full-time work. And so, yeah, the things you can learn with University of the Third Age seems like such a huge range of things. Spoke to someone who took up ballet – there's a special Royal Academy of Dance ballet course for over-50s. So, yeah, worth looking at local community groups, sports groups, local organisations and try things out. I know Stuart said that doing more volunteering with the mountain rescue was actually something that helped him to start settle into retirement and to feel more positive.

James Rowe: And even if you have gone through that process of figuring out what you will do with your spare time, there's also an acceptance of knowing that you will probably have this adjustment period where you almost certainly won't just be able to adjust from one day you're at work and the next day you are not at work and probably not at work ever again. You just have to accept that there will be that transition as well.

Holly Lanyon: Yeah, exactly. And that was something that Stuart said, is just give yourself time to decompress, know that it's okay to do that and don't put too much pressure on those initial few months. One thing as well, I think actually to add, is that retirement is not for everyone defined as being stopping work. So one of the members in our survey had said they hadn't been able to work due to chronic health issues, and actually had found the transition to retirement in terms of receiving the state pension instead of disability benefits had actually been really positive, just because of how stressful they'd found navigating the benefits system. So important as well to acknowledge exactly that retirement isn't necessarily just about now you're not working; it's a whole range of experiences.

James Rowe: And you may take up part-time work. It's not to say you have to fully stop working. You may take up a job where it's a day a week or maybe a weekend or something just to fill the time. There's not a rule that says you have to fully stop working either.

Holly Lanyon: Yeah, exactly. And one of the members that I spoke to actually had retired early to have more time to care for their family, and at the time had done all the calculations – this was pre-COVID – had spoken to a financial adviser, had a defined-benefit pension from years working for the same company, and was like, "Okay, yeah, we will have to live a little bit more economically, but this should be doable, and my priority right now is having the time to look after my family."
But then obviously COVID hit, prices have risen and basically nowhere near as easy as the calculations made it look like it would. So he's returned to work doing casual work as an invigilator, and said it was important to him that it's something that he has more freedom and flexibility than his previous work did, but for now, yeah, it was playing a really important role. So, yeah, exactly. And actually how to define retirement is just a really interesting question. Lots of the people I spoke to were like, "I think I'm retired. Kind of." It's a can of worms, exactly!

James Rowe: Anything else to mention in this? I appreciate there was a lot that you did, there was a lot of members you spoke to, a lot of, as we said before, stats and numbers that came out of it, but anything else to mention, do you think?

Holly Lanyon: You know what, I actually just really enjoyed speaking to people for this piece, and that was one of the tips from some of the retired Which? members was, yeah, speak to your retired friends about it, ask them about their finding it, how they're finding it. Nurture relationships as well, I guess that's one thing, is it's a shift that will also affect your relationships in many ways. You'll be spending presumably a lot less time with colleagues if you were working and potentially more time with friends and family. So nurture those relationships, get support from there as well if you can. That would be my advice.

James Rowe: Very well said. Of course, Which? Money members can read Holly's full piece in the latest issue of Which? Money magazine. And if you're not, there is still plenty of other retirement guidance on the Which? website. We'll pop plenty of useful links in the show notes for you. But for now, Holly, thanks very much for your time.

Holly Lanyon: Thanks, James.

James Rowe: Thanks for listening to this podcast from Which?, the UK's consumer champion. You can find plenty more advice about what we discussed today in the show notes. There, you'll also find a link to become a Which? member for 50% off the usual price, an offer exclusively available to you, our podcast listeners.
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