Pensions Planning: The NUMBER

crv1963

kev2009 wrote: »

Just came across this thread, interesting ready - what seems to be the consensus on what is required for a simply person to liveon whilst in retirement? I seem couples have menioned 22k, some 30k but didn't see any for a single person or perhaps i missed them when skimming through the thread?

Would it be about half what couples need?

I'm a fair way off retirement but currently single and been looking at my pension recently and wondering if it will be sufficient and if i could retire before 68

Thanks

kev2009 wrote: »

Kev

I think the general rule is look at your current spending and what you think you'll spend when retired. For instance housing costs- rented vs mortgaged and will that be paid off by retirement? Some bills wont go down, utilities, council tax, TV licence etc. What will go up? Petrol costs, entertainment?


We put all our current costs down, subtracted work related costs- travel to work, coffees, professional expenses, we rounded up costs like utilities- may need heating on daytime a bit, maybe use a bit more electricity, added a bit more for entertainment/ days out. Figured for us hobby money and came to our figure.


How frugal you want to go, how do you balance having a life now against a retired life? What do you want to do in the next phase? For me it wasn't a pipe and slippers nor 6 cruises a year.


Our figure is roughly 12k to comfortably house, heat and feed then 12k (2 of us) dogs, hobbies, holidays, car(s) and general repairs with a 10k savings for new roof/ emergency repairs.


Be generous to yourself but not over the top is my advice!


Oh and don't forget to factor in your SP. We aim to go at 60 (me) and 57 (wife) but taking DB pension at 55 and then changing direction/ work and saving as much as possible to bridge the gap between retiring and SP starting.

MallyGirl

I would expect a single person to be more than half a couple.

Council tax single person discount is only 25% not 50%, lighting/heating a room costs the same if one or 2 people in it, cooking for one tends to be more than half of cooking for 2 (fuel), couples may share a car in retirement, etc.

kev2009

Thanks, Yeah i suspect the house and bills would be the same regardless of how many people were in it pretty much although maybe a little less on electricity unless 1 person has several things running in different rooms etc. I don't have a final salary pension as most of these are rare and due to my age a lot had stopped prior to getting a job. Therefore I suspect pension wont be as favourable but I am contributing. At the moment i beleive my pension is estimated to be approx 8k a year, although as I have over 20 years to go, i'm trying not to read too much into the prediction as its a long time and no one knows how markets will be in terms of pension growth and also what growth my salary may have etc. If i change some setting on the pension calculator and I say i want no tax free allowance, no guaranteed period, 0% to anyone else and a 3% increase a year I believe it would get to around 15-16k a year and then the state pension on top of approx 8k which i'm currently in line to get subject to me contributing another 10 years worth of contributions which fingers cross wont be a problem. I think nearer the time say 55 i might seek advise but jsut trying to get a idea for now to see if i'm on the right plan. In theory i will have no mortgage and own the property outright as that is due to be paid off when i retire, but i'm also trying to make over payments to hopefully have it paid of soon, hopefully by the tie i'm 60 fingers crossed.

Kev

crv1963

kev2009 wrote: »

Thanks, At the moment i beleive my pension is estimated to be approx 8k a year, although as I have over 20 years to go, i'm trying not to read too much into the prediction as its a long time and no one knows how markets will be in terms of pension growth and also what growth my salary may have etc.

Kev

Just keep plugging away, we've only over the last year or so seriously looked at it all. I read up as much as I could, played around a bit (no a lot) with our figures and looked how we can save a bit more- looked at best places to save.

DairyQueen

kev2009 wrote: »

but didn't see any for a single person or perhaps i missed them when skimming through the thread?Kev

You are right to be cautious. No offence to the fellow forum contributors but it seems that the vast majority are in couples. This is a very big advantage when you plan retirement. At the very least both partners have some SP income. Most have enough to ensure the max (or close to) SP. In addition, there are all kinds of tax benefits available to married couples that are denied to single people.

I am actually one of a couple but circumstances dictate that OH and I run separate properties (individually owned) and live apart during the week. This means that I know pretty much the difference between singledom and coupledom.

My biggest additional cost when OH is here is the grocery bill (food). The extra cost in water is marginal. My Council tax is only 25% below the payment due for a couple. I have calculated that, other than food costs, two can live (basic expenses) pretty much at the same cost as one. However those two will have much more income in retirement than people whom are single.

Of course discretionary spending will be nigh on double the cost of a single person (clothes, hairdresser, travel, hobbies, etc.) but that spending si discretionary not mandatory.

My parents (currently in their late 70s/80s) spend barely more than I do. - similar value properties and in the same area but OH is only here at weekends. Their spending is at around the 18k p.a.mark. Mine is around 17.5k. Our (other) property - main home of OH - costs more. He spends approx 20k on basic living costs despite being with me most weekends.

I think that the government has missed something significant with the nSP. Most people will qualify for it in decades to come. Double it and It is sufficient for a couple to cover a basic standard of living for both. The same is not true for people on their own - and that includes widow/ers.

The argument for individual pension income has never been stronger. Each member of a couple needs to have sufficient retirement income to survive independently of their OH/spouse.

Terron

kev2009 wrote: »

Just came across this thread, interesting ready - what seems to be the consensus on what is required for a simply person to liveon whilst in retirement? I seem couples have menioned 22k, some 30k but didn't see any for a single person or perhaps i missed them when skimming through the thread?

I am sure I posted my numbers sometime in the last year or so. I am a single person who is pretty much retired already at 58. They were 18k to live a frugal but not unpleasant life, 25k for a moderately comfortable life including some holidays.

As it is it looks like I will have 45k pa from BTLs and pensions so I am looking at trying to make myself live in more luxusry, In the short term I will be paying for tripping on boxing day, - nearly £400 for new glasses and over £1500 to get my teeth repaired

justme111

why sad icon for paying for having your teeth repaired? it is great that you are enhancing your life by it and have money to do it. You should be excited about it :T

DairyQueen

Terron wrote: »

and over £1500 to get my teeth repaired

Believe me, it could be a lot worse. My teeth have cost me almost £16000 since 2012. It's this kind of expense that should be factored into retirement plans but s rarely considered. I have also been involved in a costly planning dispute that hit me from nowhere at the end of 2016. I won't even mention how much that has cost (ouch!)

BOBS

Ive tried to do a rough budget of what money we will need to keep us going based on our current lifestyle and it doesnt look too bad ..... which makes me think I have missed something major !!

Monthly Outgoings
Mortgage ................ £0
TV Licence .................. £12
House & Contents Ins... £15
Car Insurance ..............£25
Car Tax ...................... £25
Car MOT/Upkeep ..........£40
Electric ..................... £50
Phone & BB .............. £40
Rates ....................... £80
Mobiles .................... £30
Groceries, toiletries etc £260
Christmas / Birthdays £80
Oil for heating ............ £80
Petrol ..................... £85
Money for daily exp..... £500

Total exp per month = £1322
Total exp per year = £15864
SP £155 x 2 x 52 = £16120

Have a bit of leeway here, then add on hopefully a decent amount of ISA savings (hopefully £150k) for repairs, emergencies, car upgrades etc., then group together the various pensions we have between us and all in all doesnt look too bad.
We plan to hopefully not work right up to age 68 and will have a pot put aside to save a few years worth of spending before SP kicks in.

atush

MallyGirl wrote: »

I would expect a single person to be more than half a couple.

Council tax single person discount is only 25% not 50%, lighting/heating a room costs the same if one or 2 people in it, cooking for one tends to be more than half of cooking for 2 (fuel), couples may share a car in retirement, etc.

I agree- many costs for running a home are the same if not similar for one/2