Pensions Planning: The NUMBER

Sumselkb

gwapenut said:

Is it possible you'll want to budget for a car when you retire, because you'll no longer just be walking to and from work? You may want to travel in the UK.
EDIT. To reply to your extra question, single council tax only reduces by 25%, not 50%

I'm hoping I'll get a free bus pass
For the council tax I reduced it by 25%. Thanks.

gwapenut

Sumselkb said:

gwapenut said:

Is it possible you'll want to budget for a car when you retire, because you'll no longer just be walking to and from work? You may want to travel in the UK.
EDIT. To reply to your extra question, single council tax only reduces by 25%, not 50%

I'm hoping I'll get a free bus pass
For the council tax I reduced it by 25%. Thanks.

Oops, you're right. My eyes are getting worse and worse, I mis-read it as 562 instead of 862. Sorry to confuse!

NI_BOBS

Sorry - PIN money - just money to spend as and how you normally do, treats , extras etc.  Probably money you cant really budget for, but can set a limit to.

Tassie_Devil

Here's more than you ever wanted to know about the origins of "pin money":

https://www.grammarphobia.com/blog/2019/03/pin-money.html

AlanP_2

Whilst I hope your Mum has a long and happy life and that you eventually inherit the house that is not guaranteed to happen, If your mother needs care in her latter years, and not all people do, the house as an asset of hers could be used to finance that.

Chances are it will work out as you both hope but the possibilty is there that it won't.

MallyGirl

Sumselkb said:

NI_BOBS said:

Sumselkb said:

I don't think I can figure out my number because I am in my 40's and have always lived with my mum and have never lived on my own. I give her some of my pay and she pays all of the bills so I've no idea what my number is. 

If I had to guess I would say £6,000 a year.

Best to make an estimate of what bills would be if you were paying everything yourself and work out yearly living costs.  Suggest including House and contents insurance, car running if applicable (tax, insurance, upkeep, fuel etc), Electric, broadband, mobile phone, rates,  TV licence, mortgage/rent, groceries, Christmas/birthday presents, heating oil/gas etc,  then pin money for everything else stopping for a coffee, meals out, hairdressers, beauticians, clothes etc.   Maybe factor in if you wish to travel. 
I probably have missed something obvious but you get the essence of it x 

Hopefully my mum will live a long and happy life and she's only in her 60's so living on my own isn't something I have to worry about right now. But it would still be good to know how much my living costs are and to try and plan how much to save into my workplace pension.

Here's a rough estimate:
House and contents insurance - no idea, I would have to shop around
Car - I don't own a car. It's a 10 minute walk to my work so I don't need a car.
Gas/Electricity/Gas Service - I have a smart meter and if I was living alone I think I would spend around £100 a month.
Mobile Phone - I have never owned a mobile phone and don't want one.
Mortgage/Rent - My mum has paid off the mortgage and has said she will leave me the house so I wont have mortgage/rent.
Groceries - I've no idea as my mum does all of the shopping but I would guess I would spend about £200 a month.
Council Tax/Water/Sewerage - It's around £1,150.00 for 2020/21
Housing Associations costs - £30 per month. £50 per month for a year if they paint the close or if there are extra charges.
Virgin Media (broadband/phone/tv package) - I think my mum pays around £80 per month at the moment but we have two boxes. I assume if I got rid of a box it would be cheaper? Also I could choose a cheaper package? I watch mostly netflix or amazon prime and play video games.
TV license - £157.50 a year
Gym Membership - £25 per month
Netflix/Amazon Prime - £16.98 per month
Hairdressers - I cut my own hair
Christmas/Birthday presents - I wouldn't buy any as I would live on my own and have no other family.
PIN money - what is this? I have never heard of this. What does it stand for?
Travel - I don't like to travel. I get travel sick and hate warm weather.

That's all I can think of the now. Is there something obvious that I am missing? I like to buy 2 or 3 video games every year. Would that come under PIN? Also clothes and trainers, that would come under PIN?

It does sound like you have simple (not meant in a derogatory way I assure you) and that your requirements in retirement might not be that high but the big elephant in the room, called out above, is that your Mum's house might need to be sold to cover her care if she needs it in later life.
I think that your estimates for food/fuel sound a bit low but that may be because ours are high. You may be incredibly handy around the house but if not you need to have a fund for home maintenance (electrician/plumber maybe even decorator) as well as for replacement of white goods (TVs, washing machines, computers, fridges etc don't last forever) and maybe the boiler. 
I suspect that your Mum pays out for all sorts of things that you are unaware of right now - window cleaner? green bin recycling if you have a garden, all sorts.

Sumselkb

MallyGirl said:

Sumselkb said:

NI_BOBS said:

Sumselkb said:

I don't think I can figure out my number because I am in my 40's and have always lived with my mum and have never lived on my own. I give her some of my pay and she pays all of the bills so I've no idea what my number is. 

If I had to guess I would say £6,000 a year.

Best to make an estimate of what bills would be if you were paying everything yourself and work out yearly living costs.  Suggest including House and contents insurance, car running if applicable (tax, insurance, upkeep, fuel etc), Electric, broadband, mobile phone, rates,  TV licence, mortgage/rent, groceries, Christmas/birthday presents, heating oil/gas etc,  then pin money for everything else stopping for a coffee, meals out, hairdressers, beauticians, clothes etc.   Maybe factor in if you wish to travel. 
I probably have missed something obvious but you get the essence of it x 

Hopefully my mum will live a long and happy life and she's only in her 60's so living on my own isn't something I have to worry about right now. But it would still be good to know how much my living costs are and to try and plan how much to save into my workplace pension.

Here's a rough estimate:
House and contents insurance - no idea, I would have to shop around
Car - I don't own a car. It's a 10 minute walk to my work so I don't need a car.
Gas/Electricity/Gas Service - I have a smart meter and if I was living alone I think I would spend around £100 a month.
Mobile Phone - I have never owned a mobile phone and don't want one.
Mortgage/Rent - My mum has paid off the mortgage and has said she will leave me the house so I wont have mortgage/rent.
Groceries - I've no idea as my mum does all of the shopping but I would guess I would spend about £200 a month.
Council Tax/Water/Sewerage - It's around £1,150.00 for 2020/21
Housing Associations costs - £30 per month. £50 per month for a year if they paint the close or if there are extra charges.
Virgin Media (broadband/phone/tv package) - I think my mum pays around £80 per month at the moment but we have two boxes. I assume if I got rid of a box it would be cheaper? Also I could choose a cheaper package? I watch mostly netflix or amazon prime and play video games.
TV license - £157.50 a year
Gym Membership - £25 per month
Netflix/Amazon Prime - £16.98 per month
Hairdressers - I cut my own hair
Christmas/Birthday presents - I wouldn't buy any as I would live on my own and have no other family.
PIN money - what is this? I have never heard of this. What does it stand for?
Travel - I don't like to travel. I get travel sick and hate warm weather.

That's all I can think of the now. Is there something obvious that I am missing? I like to buy 2 or 3 video games every year. Would that come under PIN? Also clothes and trainers, that would come under PIN?

It does sound like you have simple (not meant in a derogatory way I assure you) and that your requirements in retirement might not be that high but the big elephant in the room, called out above, is that your Mum's house might need to be sold to cover her care if she needs it in later life.
I think that your estimates for food/fuel sound a bit low but that may be because ours are high. You may be incredibly handy around the house but if not you need to have a fund for home maintenance (electrician/plumber maybe even decorator) as well as for replacement of white goods (TVs, washing machines, computers, fridges etc don't last forever) and maybe the boiler. 
I suspect that your Mum pays out for all sorts of things that you are unaware of right now - window cleaner? green bin recycling if you have a garden, all sorts.

I will hopefully have a good pension pot saved up by the time I come to retire so that should help with a fund for home maintenance and the replacement of white goods and any other extra costs.

My current workplace pension is a little over £3,000 but I only started paying into a workplace pension for the first time ever a couple of years ago. I am putting about £1,550 into my pension pot every year and I am thinking about starting a SIPP (I think that's the right word) and saving between £1,000 and £1,500 into that every year. It's not easy with a low salary but I will save where I can.

I am supposed to get the state pension when I am 68 and currently have 18 full years of ni contributions. So if the state pension still exists when I retire then I should be okay.

I know that we used to have a window cleaner and it was £7 a month but he stopped showing up last year. I would just clean the windows myself. We don't have a garden and are two floors up.

No doubt there are some other extra costs of living that I don't know about that my mum doesn't tell me about but I will hopefully be able to deal with things when I'm in the situation of living alone.

I don't like planning too far into the future because I don't know how my life will change. 

crv1963

Bumping to help some newer posters with their planning- this was a great thread when I started seriously looking at our retirement plans.

DairyQueen

crv1963 said:

Bumping to help some newer posters with their planning- this was a great thread when I started seriously looking at our retirement plans.

+1 to this ^.
 It was also the first thread that I contributed to - and that seems like a lifetime ago

Pile_o_stone

This much better, and way more realistic than that other thread where people just seem to be focused on hoarding money just so they could (tell people they) have a £1m pension pot.