Upon decommission in 1952, "Liverpool" entered the reserve at Portsmouth Naval Dockyard. "Liverpool" became an accommodation ship at Portsmouth and was used by the "Senior Officer, Reserve Fleet" and his staff. Comprehensive plans were drawn up for the modernisation of HMS Liverpool. The Town class cruisers were assessed as suitable for mounting three of the new twin Mk 26 twin 6 inch guns, while the smaller Fiji and Minotaur class cruisers could accommodate only two. HMS "Belfast" and HMS "Liverpool" as the two largest Town-class cruisers were considered priorities for modernisation in the early 1950s and with the "Minotaur"-class cruisers, HMS "Superb" and HMS "Swiftsure", were the only wartime legacy cruisers for which a full ships cover was drawn, for modernisation with postwar weapons systems. However, the gradual rationalisation of the Royal Navy began in earnest in the 1950s under Duncan Sandys' 1957 Defence White Paper, and the reserve of at least 551 ships was abolished. With the complete withdrawal from service of wartime cruisers by the 1960s, the roles of "Liverpool" and her contemporaries effectively became superseded by the guided missile destroyers and the three cruisers of the . "Liverpool" was sold in 1958 for breaking up at Bo'Ness, Scotland; more than 12 months elapsed before the vessel had been completely dismantled.