With millions of retirees facing rising living costs and longer retirements, making your pension savings last has never been more important. In fact, nearly a third of retirees believe their living standards have dropped compared to pre-retirement, recent analysis from Standard Life shows.

But there are small ways in which Brits can manage their withdrawals tax-efficiently while still having the money there when they need it most. Experts at The Pension Planner have compiled a list of five simple tips to help retirees make their income last longer. From emergency funds to the importance of timing, here are the five tricks needed to save your money.

The experts said that “your first line of defence should always be an emergency fund”.

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They recommended keeping the cash equivalent of approximately six months of household expenditure in an easy access account. They also reminded retirees that while keeping some money in cash is important for emergencies and everyday spending, holding too much can come at a cost.

Cash savings usually earn lower returns than investments, and during periods of high inflation, the purchasing power of your money can fall over time. In other words, it may buy less in the future.

That’s why it’s generally a good idea to keep enough cash for short-term needs, but not more than necessary.

The experts said: “Managing pension decumulation is a difficult juggling act. You need to think about how much money you need now, as well as how much you might need in the future.

“This means factoring in the cost of later-life care, for example, and understanding the impact of inflation and market dips.”

They explained that when inflation is high the purchasing power of your withdrawals falls, which may encourage you to take more money from your pension.

Short-term market ups and downs can reduce the value of your pension investments. This might mean Brits need to withdraw more of their pension savings to generate the same income, which could cause pots to run out sooner than expected but regularly reviewing your pension can help you stay on track.

The Pension Planner said: “If you receive employment income, possibly alongside personal pension income, it might make sense to defer your State Pension until you really need it.”

They elaborated, explaining that deferring the State Pension is easy because you have to actively apply for it. Therefore, if you choose not to apply, and your entitlement will be deferred. Also, the amount you receive when you do opt to take it will normally be higher.

They added: “If you reached State Pension Age on or after 6 April 2016, and defer for at least nine weeks, you’ll receive an additional 1% for every nine weeks you defer (or around 5.8% a year).”

Chancellor Rachel Reeves made the decision to bring unused pensions into the scope of Inheritance Tax (IHT) from 2027. Therefore, those planning to use their pension as a means of passing on a tax-efficient inheritance, may need to have a rethink.

But The Pension Planner added a helpful reminder: “Remember, however, that pensions are a tax-efficient environment, and these new rules only apply to estates where IHT is payable. The nil-rate and residence nil-rate bands currently stand at £325,000 and £175,000, respectively.

They wrote: “The spousal exemption will continue to apply from 2027, so you can pass your pension to your spouse tax-free.

“Unused IHT allowances can also be passed between spouses on death, and that could leave your partner with £1 million of tax-free allowance.”

With pension funds coming into scope for IHT, The Pension Planner suggests being careful when it comes to managing withdrawals so that retirees avoid unnecessary tax bills when they pass.

They said: “This might include timing withdrawals across tax years or transferring funds to a spouse or partner to share exemptions and allowances.”