Should I spend more while I’m still healthy?

Many people spend years saving and investing. But when it comes time to spend the money, it can feel difficult.

This is normal. You have worked hard and saved carefully. You have seen markets go up and down. Tax rules change. The news can be worrying. You might worry about care costs, helping your children, losing your partner, rising prices, or living longer than you expect.

So it is natural to feel cautious. Being careful is good. But there is also a risk. You might spend too little, even when your money could improve your life. Some people ask, ‘Can I spend more while I am still healthy enough to enjoy it?’ This might mean travelling more, helping your family sooner, improving your home, taking everyone on a trip, working less, giving more, making life easier, or finally doing things you have put off. The goal is not to spend just because you can. The real risk is being so careful that you miss the years when your money could help you most.

Retirement is not one fixed period

Most people move through different phases. In the early years, you are more likely to travel, see friends, help family, and enjoy new things. Later, life often becomes more local and routine. You may travel less and spend less on extras. In later life, health, care, and support needs can become more important.

A good plan should reflect this. It is not as simple as your spending just rising with inflation every year. Some costs will go up, but many lifestyle costs may fall as you get older. That is why timing matters. Spending more at 65 may give you much more value than waiting until you are 85.

Why people underspend

There are sensible reasons to be cautious:

• You do not know how long you will live.

• You do not know what markets will do.

• You do not know whether care will be needed.

• You do not know what tax rules will change.

• You do not want to become a burden on your family.

All of this matters. But do not just follow fear. Test your plan. If it still works in tough times, the problem may be confidence, not money. That is where proper financial planning helps. Cash flow planning can help with these worries. It can show you when it is safe to spend. A cash flow plan does not predict the future. It is a tool to help you make decisions.

It can help you test questions like: Can you spend an extra £10,000 a year until age 75? Can you take the family on a big holiday every other year? Can you help your children now instead of waiting? Can you take more from your pensions, ISAs, or other investments? It can also test the difficult scenarios. What if markets are poor for the next five years? What if inflation stays higher than expected? What if one of you needs care? What if one of you dies earlier than expected?

The chart is not the important part. The real value is the conversation it starts. It turns a worry into something you can check and plan for.

Recent rule changes make this kind of planning even more important. For many years, pension planning has often been built around the idea of spending non-pension assets first and preserving pensions for later. That may still be right in some cases. From 6 April 2027, most unused pension funds and pension death benefits are expected to be taxed for inheritance. This means passing on pension money could now lead to extra inheritance tax for your family. It is important to review your plan. This does not mean you should take all your pension money out now. Doing that could mean paying more income tax. But the new inheritance tax rules mean some people may need to rethink which money to spend, give away, or keep, to manage both income tax and inheritance tax. The right answer depends on your own situation.

For some people, it may make sense to use pension money sooner. For others, it may be better to use ISAs, other investments, or cash. Some may want to give gifts while alive. Others may need to keep their options open. The right answer depends on what income you need, your tax situation, the size of your estate, your family, and how much security you want. There is no one-size-fits-all answer.

A simple way to think about your money

• One simple way to think about your money is to give it different jobs.

• The first job is essential spending. This covers the basics, including bills, food, housing, insurance and normal living costs.

• The second job is comfort spending. This is for the lifestyle you want to keep.

• The third job is memory spending. This is money for travel, family experiences, celebrations, and the things you will value most while you are fit and active.

• Family support means helping with gifts, education, house deposits, or supporting your children and grandchildren.

• The fifth job is later-life security. This is for care, your partner if you die first, tax, emergencies, and peace of mind.

The mistake is letting later-life security take over everything else, without checking if you really need to be that careful. Security is important, but it should not take up the whole plan unless the numbers show you need it.

When you should stay cautious

Spending more is not always the right answer. You should be careful if your income only just covers the basics. Be careful if you rely on one investment or property, have no plan for your partner if you die first, do not have enough cash, your investments are too risky or too safe, you have big debts, your wills or powers of attorney are out of date, or you have not thought about care costs.

Be careful with gifts unless you are sure you can afford them. Helping family feels good, but you need a plan. Confidence should come from facts, not just hope. Check the numbers before you decide.

So, what should you look for when reviewing your financial plan?

If you are not sure if you can spend more, a good review should look at your spending now and in the future, your guaranteed income, pensions, ISAs, savings, investments, tax, estate, family plans, care needs, investment risk, and how you take money out. It helps to see the full picture.

It should also include ‘what if?’ questions. A good plan should show what happens if things go well, but also if markets do badly, prices rise, you spend more, or your health changes. This helps you prepare for surprises.

This gives you a clearer answer. You can see what is safe and what is not. Sometimes the answer will be, “No, stay cautious.” Sometimes it will be, “Yes, but only up to a limit.” Sometimes it will be, “Yes, you are being far too cautious.” All three answers are useful.

The real aim

Money has different jobs. It should give you security, but also freedom. It can help your family. It can help you use your time better. It can help you do things while you still have the health and energy to enjoy them.

The best plans do not just protect your money. They help you use it well. So, should you spend more while you are still healthy enough to enjoy it? Maybe. But do not guess. Test it properly. Know the trade-offs. Then make your decision with confidence.

If you need advice, we’re here to help. Schedule a free, no-obligation chat here. A guide on selecting a financial advisor is also available here.