One in five (20%) Brits over the age of 55 have consistently spent more than they expected to during their retirement so far, PensionBee has revealed.

The survey by the retirement firm also found that an additional 11% expressed that this occurred early on in their retirement.

Over a quarter (28%) said that daily living expenses emerged as their largest financial burden, which PensionBee said may be attributed to the rising cost of living in the UK since 2022.

Housing costs, including mortgage payments and general property maintenance, ranked as the second-largest expense, with 21% of retirees identifying it as their biggest financial commitment.

Director of public affairs at PensionBee, 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."

PensionBee also surveyed pre-retirees, aged between 18 and 54, about what they anticipated would be their largest expense in retirement.

Housing costs emerged as the most common concern (28%), with PensionBee stating that this reflects "worries over rising property prices in the UK". Nearly a fifth (19%) of young savers aged 18 to 24 believe they’ll use their retirement savings to support their families, such as money for a house deposit.

Meanwhile, 20% of pre-retirees said they expect care costs to be a significant financial burden in retirement.

O’Connor added: "The survey data suggests that when retirement planning, assuming you will overspend beyond the budget that you initially set could be a wise way to minimise any nasty surprises.

"Using generic guidance on how much you might need for different living standards may be useful, however, bear in mind that spending needs are extremely subjective and based on many factors, such as housing costs, the number of children or grandchildren you may have, health and life expectancy."

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