Pensions Planning: The NUMBER

daveharruk

I agree with much of what has been said about the new PLSA figures - looking at the moderate figures for a single person, they seem to have gone up by 50% and the majority of that seems to be due to "increased expectations" of what they think that means, rather than inflation. I estimated my expenditure at £18000 (using the MSE spreadsheet so it does consider pretty much everything) and when I took their figures but removed what we don't do I came to almost exactly £20000 (although I am married, my wife will be continuing to work for the mean time, so the assumption is that she will be financially independent while she is still working), so around 1/3 less than their suggestion. To be fair with their figures, one of the biggest items of expenditure we save on is car use at £4158 (instead we walk/run/cycle, use bus/train (with railcard), Uber or City Car Club/some other hire company outside the city instead as necessary). We don't have grandchildren either, which is another £1200. I forget the exact fuel costs they quote, but £3000 seems very high - we are only spending around £2000 which looks like it will be steadily dropping in the near future too. Their eating out bill of £1500/yr is also quite high for us. I found the clothes spending of £1500 pretty excessive too - I estimate mine at about £100 per year. OTOH, if you ask people on a money saving forum what they spend, I am guessing it's almost certain to be less than average, so perhaps we shouldn't be massively surprised at the apparent profligacy of our fellow citizens.

Spreadsheet_Addict

I posted on this thread a couple of years back. I'm now under 6 months from retirement and I've also seen some of the scary numbers being thrown up on the news.  Aside from the utter subjectivity of people's individual lifestyle expectations, it also (in my view) serves the interests of the pensions industry to ramp up the amounts people put in to their pension savings by scaring them and the government is always happy in case they want to increase the pension age or reduce expenditure on things like Pension Credit.

For me, I look at my full spreadsheet (detailed, month by month) of income and expenditure before and after retirement and when my retirement matches or exceeds what I'm living on now (since I am making huge pension payments and clearing the last of my debt) I can retire.  I go debt free this May. Retire in August and wife follows 2 years later. All our pensions are DB and index linked. We will have the same month to month income, less expenses as before retirement and we will also have a lump sum providing about £7k a year for extra holidays on top of that.  Look at your own circumstances, your own expectations and do your sums thoroughly and it doesn't matter what the press says, when you can afford it, you can afford it.

MallyGirl

Prompted by these discussions I have started a new tab in the spreadsheet to record things under headings. Up till now everything is all recorded and linked together but not broken out by spend category as we put much of it on CC to get 0% period/cashback. That makes it had to track spending. New Year, new tracking as I am hoping it will be just 3 years left

South_coast

Stubod said:

....that spend represents well over double what I would consider to be the "normal"....so are most people eating 2.5 times as much as us???....they must either excercise a lot or be slightly on the "obese" side of things...

Guess that means they've got gym expenditure going towards that total cost as well then 😀

Samuelsjourney

5 years from retirement, will be 62.  Mix of DB/DC and SIPP. Looking at 3k net per month.

Spreadsheet_Addict

Should have added given this is "the number"  - After tax DB pension joint income will be £34k which is £1k more than we live on right now since about 50% of salary goes on debt clearing and AVCs.  Lump sums will fund £50k of home improvements, £20k emergency fund, £15k for replacement cars (current one is 18 years old and going strong - I never buy new) and £7k PA for just holidays, eating out and breaks over and above what we do now (1 week away, plus about 3-4 weekends away) until my state pension kicks in at 67. I'm 55 in April.

westv

MallyGirl said:

Prompted by these discussions I have started a new tab in the spreadsheet to record things under headings. Up till now everything is all recorded and linked together but not broken out by spend category as we put much of it on CC to get 0% period/cashback. That makes it had to track spending. New Year, new tracking as I am hoping it will be just 3 years left

The only categories I use for our spending are  Bills, Holidays, Food, House, General spending.

MallyGirl

We have expensive pets (old large breed dogs) so they get their own category, 2 cars and a campervan, plus costs associated with our daughter that she will take on once she qualifies and gets a job. I expect I will set up sub totals once it gets going to show the headline figures. At the moment a lot would come under 'other' which tells me nothing.

Pat38493

Madness maybe but in my finances I have 51 different categories at the lowest level.  I am using an automated service which automatically categorizes most of the spend into the correct bucket.  I then have summary groups above that.  

Stubod

...51 seems a bit excessive ...IMHO....although I have just checked my own and I have 18...