5 Common Retirement Planning Mistakes and How to Avoid Them

Callum Dunbar
Sep 5, 2025
2 min read

Retirement should be a time to enjoy the life you’ve worked hard to build whether that means travelling more, spending time with loved ones, or simply slowing down to enjoy the everyday moments.

But achieving the retirement you want doesn’t happen by accident. Careful planning is key, and avoiding common mistakes can make the difference between feeling financially stretched and living with confidence.

At Cleveden Park Wealth, we’ve guided many clients through retirement planning. Here are five common mistakes we see and how to avoid them.

1. Underestimating How Much You’ll Need

Many people underestimate just how much income they’ll require in retirement. It’s not just about covering day-to-day expenses - there’s also travel, hobbies, family support, and the rising cost of living to consider.

How to avoid it:

Start with a clear picture of the lifestyle you want.
Use cashflow forecasting to estimate income and spending needs over the long term.
Factor in inflation - today’s £1,000 won’t buy as much in 20 years’ time.

2. Relying Too Heavily on the State Pension

The State Pension provides a foundation of income, but for most people it won’t be enough to sustain the lifestyle they want in retirement.

How to avoid it:

Treat the State Pension as a supplement, not the whole plan.
Build additional income streams through pensions, ISAs, and other investments.
Check your National Insurance record to ensure you’re on track to receive the full amount.

3. Not Making the Most of Tax Relief

Pension contributions are one of the most tax-efficient ways to save for retirement, yet many people don’t maximise their allowances. Missing out on tax relief means missing out on free money from the government.

How to avoid it:

Contribute as much as you can within your annual allowance (£60,000 or 100% of earnings, whichever is lower).
If you’re a higher or additional-rate taxpayer, claim back extra relief via self-assessment.
Consider employer contributions, salary sacrifice, and other strategies to boost your pot efficiently.

4. Failing to Diversify Investments

Relying too heavily on one type of investment whether cash, property, or a single stock market can leave your retirement savings vulnerable to risk.

How to avoid it:

Spread your investments across asset classes (shares, bonds, property, cash).
Diversify geographically, not just in the UK.
Regularly review your portfolio to ensure it matches your risk tolerance and retirement horizon.

5. Not Reviewing Your Plan Regularly

Life changes. So do tax rules, investment markets, and personal goals. A “set and forget” approach can easily leave you off track.

How to avoid it:

Review your retirement plan at least once a year.
Adjust for changes in income, expenses, or family circumstances.
Work with a financial adviser who can keep you accountable and proactive.

Final Thoughts from Cleveden Park Wealth

Avoiding these common mistakes can make a huge difference to your retirement journey. With the right planning, and regular reviews, you can retire with confidence, knowing your finances are working hard for you.

Ready to take control of your retirement planning? Speak to our team in Finnieston today for tailored advice and a plan built around your goals.