A new study by the Institute of Fiscal Studies (IFS) has found that on average people aged between 70 and 90 only use less than a third of their assets to fund their lifestyles in retirement. Over two thirds still remain at the end of their lives.

That’s fine if it is the intention to make sacrifices in later life in order to leave significant sums to offspring, charities or, if no arrangements are made and there are no relatives, the government.

But for most people we suggest that they would much prefer to balance the sum left with the potential to have a much more fulfilling old age and, in any case, as life expectancy increases children will be much older when parents die than was the case in previous generations. For instance; if a child is born to parents aged thirty, by the time that child inherits, that child could well be close to retirement by the time he or she inherits.

You could argue that the child (now nearing retirement) should by now have made suitable arrangements to keep him or her comfortable in their own retirement.

Of course, the reason in many cases is that the retiree in question has no idea how long their money will last if they use some of those assets to supplement income from pensions and investments alone.

Former pensions minister Steve Webb, now a director at Royal London, is quoted by Sky News as saying: “This report confirms that the vast majority of pensioners who have saved through their working life are cautious with their money and leave unspent wealth at the end of their lives.

“This is great news for those who believe in pension freedoms.”

“The IFS research suggests that the biggest concern about pension freedoms is likely to be about excessively cautious retirees’ spending too slowly than it is about reckless retirees blowing their pension savings on lavish living.”

RetireEasy certainly would not condone ‘recklessness’ but there should be a middle ground between this and the excessive caution revealed by the study and described by Steve Webb.

We created the RetireEasy LifePlan cash flow-based planning tool for just this purpose: for those planning retirement to be able to live a better life whilst not worrying about when the money will run out.

This has three benefits:

1.     For the individual: A better life in retirement and the comfort of knowing that the money will last.

2.     For the economy: The vast store of wealth owned by the older generation can in part be released into the economy meaning more goods bought, more holidays taken and more spent on food at home and in restaurants, even less reliance on the NHS and social services. The positive impact on the UK economy could be substantial.

3.     The Country: Knowing how to make money last throughout retirement suggests that fewer people will run out and then rely on government (and therefore taxpayers) to bail them out later in life

RetireEasy.co.uk has three levels of LifePlan: Basic, Classic and Premium, the last of which enables automatically updated Share and Fund values each time the user logs in. Click here for more information and to see how it works.