Pensions Planning: The NUMBER

Kim1965

pensionpawn said:

expectingtofly said:

This has been a fantastically useful thread, so I thought I would update with our experiences :

As a couple, we have now not worked since around the end of 2020.   
We had a pretty good idea of what our NUMBER was before we stopped, as we had always recorded all our expenditure in Microsoft Money (we had detailed expenditure records going back to 1999!) and always operated our financial affairs completely jointly.
Our aim was to continue the same lifestyle we had while we were working once we had stopped (without the worky bit!).  We don't have a lavish lifestyle,  but we like not having to worry about money. 
We have found that always recording what we spend and having all our finances in joint accounts means that we naturally live within our means and helps us to plan.   My personal experience is that recording what you spend takes less time than you would think and for us it means we can spend less time worrying about it!

Having now lived the retirement life for almost  2 years and we are now pretty sure what our current NUMBER is, it's around £37,500 net.  

As well as recording all our finances in Microsoft Money, I have a detailed planning spreadsheet where I record our overall monthly spend and plan where all our money comes from in the future to ensure that we can continue to cover our NUMBER as inflation rises, and that we can afford the odd one off expenditure (house maintenance, car replacement etc).   From there I have a useful graph that shows the monthly rolling annual expenditure compared to the maximum we can spend without blowing our resources.  As you can see it's reasonably consistent (you can also see the impact of inflation!) and we are managing to live within our means.


In case it is useful to anyone, this is our current categorised spending for the last 12 months so you can see how our NUMBER has currently broken down.



Hope that is of some use to other's plans.

I'm having difficulty balancing "don't have a lavish lifestyle" with £37k retirement income! The median UK household income in the UK in 2021 was £28K (ONS).

Over 4k on cars, out of interest is some of this for leasing/saving for replacements? 

michaels

Kim1965 said:

pensionpawn said:

expectingtofly said:

This has been a fantastically useful thread, so I thought I would update with our experiences :

As a couple, we have now not worked since around the end of 2020.   
We had a pretty good idea of what our NUMBER was before we stopped, as we had always recorded all our expenditure in Microsoft Money (we had detailed expenditure records going back to 1999!) and always operated our financial affairs completely jointly.
Our aim was to continue the same lifestyle we had while we were working once we had stopped (without the worky bit!).  We don't have a lavish lifestyle,  but we like not having to worry about money. 
We have found that always recording what we spend and having all our finances in joint accounts means that we naturally live within our means and helps us to plan.   My personal experience is that recording what you spend takes less time than you would think and for us it means we can spend less time worrying about it!

Having now lived the retirement life for almost  2 years and we are now pretty sure what our current NUMBER is, it's around £37,500 net.  

As well as recording all our finances in Microsoft Money, I have a detailed planning spreadsheet where I record our overall monthly spend and plan where all our money comes from in the future to ensure that we can continue to cover our NUMBER as inflation rises, and that we can afford the odd one off expenditure (house maintenance, car replacement etc).   From there I have a useful graph that shows the monthly rolling annual expenditure compared to the maximum we can spend without blowing our resources.  As you can see it's reasonably consistent (you can also see the impact of inflation!) and we are managing to live within our means.


In case it is useful to anyone, this is our current categorised spending for the last 12 months so you can see how our NUMBER has currently broken down.



Hope that is of some use to other's plans.

I'm having difficulty balancing "don't have a lavish lifestyle" with £37k retirement income! The median UK household income in the UK in 2021 was £28K (ONS).

Over 4k on cars, out of interest is some of this for leasing/saving for replacements? 

I always include 'accruals' for depreciation/repairs in my number estimates - eg buy a 2 year old car at 10k (is this possible anymore?!) run it to 10 years old when it might be worth 2k => cost £1k pa - add on tax, insurance, servicing, average repair bill etc to give annual motoring cost

michaels

AlanP_2 said:

People don't compare themselves to some unknown, statistical average person identified within government statistics, they relate and compare to their known peers.

That may be neighbours, family, friends, work colleagues, acquaintances.

A classic example was that guy on Question Time just before the last election who claimed his £80k salary was "average". It probably was among his peers but certainly wasn't when compared to UK statistical average.

The post /amounts being discussed don't sound lavish to me as our number is higher, with a different spread across categories, to others (perfectly reasonably) it seems lavish.

I think unless we can recognise the lived experience of our fellow citizens then it is hard to have empathy.  Failing to recognise that 37k pa is actually comfortably above average does mean that perhaps we will make the wrong choices when assessing for example what help people might need to meet rising fuel bills.

Silvertabby

We are all different.  We spend more than £200 per week on groceries, but that includes cleaning materials, cat food and so on.  We have never been keen on holidays, having travelled extensively during our RAF careers - but we do like our new car every 5 years.  I know people will say buying new cars isn't very MSE, but Mr S gets a lot of pleasure out of selecting the right model, extras, colours, etc.  And we both like having a car that doesn't stink of a previous owners filthy cigarettes 

Yes, there are pensioners out there who are struggling, but it's not as bad as the media likes to make out.  You only have to see me and my fellow silver shoppers with our full M&S foodhall trollies to know that.

For us, rising fuel bills are an annoyance rather than a concern, but there is a way we can help those less fortunate.  We already give our winter fuel allowance to 2 family members who need it more than we do, and that will include this year's extra £300.

expectingtofly

Kim1965 said:

Over 4k on cars, out of interest is some of this for leasing/saving for replacements? 

The fact that you find that surprising I find interesting.  I guess its partly down to how we categorise it in microsoft money and how much people think they spend on their cars.  We have 2 cars.  A 3 year old car and a 20 year old campervan that we have owned for 10 years.    So in that is all the maintenance, tax and petrol costs.  We don't travel that far, but we use them both fairly regularly.  It does, I'm afraid cost around 2k per year to run a car nowadays

expectingtofly

billy2shots said:

psrespectful to the forum member but I personally would find over £200 a week on food for a couple 'lavish'. Add in £3500 on gifts and it's getting close to the idea of that lavish description in a lot of peoples books. 

Yeah, that is a bit high.  We put all our groceries and dining out and the odd pint at the pub in that main food category in Microsoft money.  So I don't think we spend more than the average, probably a bit less than the average on eating out.

expectingtofly

pensionpawn said:

I'm having difficulty balancing "don't have a lavish lifestyle" with £37k retirement income! The median UK household income in the UK in 2021 was £28K (ONS).

Yes I agree, I probably didn't describe it very well, but I was trying to show that we feel comfortable now we know what our "number " is and show what that means in terms of what we have recorded we have spent.   
Most of us have lived through the various stages of income and know when we are comfortable.   We also have our own views on what lavish is,  we don't replace something unless we need to and value what we have.  We would probably identify somebody who is always getting new furniture and replacing things "because they want a change" as lavish.  We all have our own world view, I guess.

MallyGirl

It is all about what matters to you. I have no interest in make up or clothes - beyond the functional - and often find a FB memory from years ago comes up with me dressed in something that I still think of as quite new. We often comment on things 'not lasting' when they break after 20 years - but then we also like tech.

expectingtofly

michaels said:

AlanP_2 said:

People don't compare themselves to some unknown, statistical average person identified within government statistics, they relate and compare to their known peers.

That may be neighbours, family, friends, work colleagues, acquaintances.

A classic example was that guy on Question Time just before the last election who claimed his £80k salary was "average". It probably was among his peers but certainly wasn't when compared to UK statistical average.

The post /amounts being discussed don't sound lavish to me as our number is higher, with a different spread across categories, to others (perfectly reasonably) it seems lavish.

I think unless we can recognise the lived experience of our fellow citizens then it is hard to have empathy.  Failing to recognise that 37k pa is actually comfortably above average does mean that perhaps we will make the wrong choices when assessing for example what help people might need to meet rising fuel bills.

I'm not sure if I agree with your interpretation of what I was saying,  but I was saying 37k is the lifestyle we personally are comfortable at and we naturally fit into, and so is our actual lived "number".   Many people have a higher one (reading this thread tells us that)
I absolutely know that it is above the average household income, and I am fully engaged with the lived experience of my fellow citizens (and my family!).  The imbalance of how the working young (student loans, NI, house prices) are treated compared with the older and comfortably well off is one of the political time bombs that is going to go off at some point, IMHO.

michaels

expectingtofly said:

michaels said:

AlanP_2 said:

People don't compare themselves to some unknown, statistical average person identified within government statistics, they relate and compare to their known peers.

That may be neighbours, family, friends, work colleagues, acquaintances.

A classic example was that guy on Question Time just before the last election who claimed his £80k salary was "average". It probably was among his peers but certainly wasn't when compared to UK statistical average.

The post /amounts being discussed don't sound lavish to me as our number is higher, with a different spread across categories, to others (perfectly reasonably) it seems lavish.

I think unless we can recognise the lived experience of our fellow citizens then it is hard to have empathy.  Failing to recognise that 37k pa is actually comfortably above average does mean that perhaps we will make the wrong choices when assessing for example what help people might need to meet rising fuel bills.

I'm not sure if I agree with your interpretation of what I was saying,  but I was saying 37k is the lifestyle we personally are comfortable at and we naturally fit into, and so is our actual lived "number".   Many people have a higher one (reading this thread tells us that)
I absolutely know that it is above the average household income, and I am fully engaged with the lived experience of my fellow citizens (and my family!).  The imbalance of how the working young (student loans, NI, house prices) are treated compared with the older and comfortably well off is one of the political time bombs that is going to go off at some point, IMHO.

Apologies, I think several of us have read much too much into the word 'lavish' in your original (and very helpful) post.