Is £200k enough to live on?

Le_Chuck

beanys wrote: »

can you afford to live on 10k a year with bills and food etc till your 60 , i doubt it :rotfl:

I reckon it could be done. you can buy terreaced houses parts of the country for less than £50k. Earn £7k interest on remainder.
If you live on your own, household bills (utilities/ council tax/ insurance) for me is around £3k. £1k on food, £1k on general bit & bobs.

bbjohnny

My autistic great uncle retired in his 30s with a large redundancy package combined with his savings. He already owned his property, and he lived off the interest of his savings until interest rates fell a few years back. He was a simple man with simple needs and even when he had to start using his actual savings he still managed. He's not far off collecting his pension now, which even at part pension is still going to be over £20,000 a year (with no mortgage).

I think you could do it with careful planning. Perhaps by buying a property, investing the remainder carefully and renting out a room in your new property for a while?

erdd2

Not a problem according to government...and before the snipers come out, that is contemplating housing cost will not be provided by the gov!

macman

Assuming a safe 4% return on the £200K, that generates 8K pa. Out of that you want to spend £2,400pa/£200pm on your pension contributions, and rent in London (I'm guessing minimum £400pm for that). So out of your income of £666pm, you'll have £66 left for food, transport, and all your utility bills and other overheads.
As our US cousins would say, you do the maths.

Tarontis

My Dad retired roughly 7 years ago with £20k in savings. I think he has used about 2/3 of it in that time, and is now moving out to Bulgaria as the remainder will last him the rest of his life out there with the cost of living being so low.

I'm no sure why so many seem to think £200k would be impossible to live on, you could easily live in luxury for that amount if you were careful, bought a modestly sized house in Scotland and got in a lodger to supplement your income, or just move to Bulgaria!

It depends entirely on how you want to live those 20 years, if you want to have a busy lifestyle in London, then no probably not. If you enjoy solitude and working on your own personal projects like tinkering with motorbikes or something, then you'd be set for life with plenty left over.

Besides you'd probably want to do one or two things to make money in the course of 20 years, even if it was a bit of part time work, as you would get pretty bored otherwise, since it won;t be enough to indulge many expensive hobbies.

macman

The OP referred to living off £200K, most of us understand that as preserving the capital and living of the income that can be generated. In which case the answer is clearly no.
Your father cannot possibly have lived for 7 years by spending about £2000 pa of his savings, he must have had some other source of income in that time.

Eric_Pisch

macman wrote: »

The OP referred to living off £200K, most of us understand that as preserving the capital and living of the income that can be generated. In which case the answer is clearly no.
Your father cannot possibly have lived for 7 years by spending about £2000 pa of his savings, he must have had some other source of income in that time.

yep the biggest killer is capital depreciation, made worse with news that inflation is set to hit 5% and interest rates are to stay low for the long term now

this means your going to need to earn 5% after tax just to have the same 200k spending power left this time next year

buying property's and renting them out might be a possibility

Le_Chuck

macman wrote: »

The OP referred to living off £200K, most of us understand that as preserving the capital and living of the income that can be generated. In which case the answer is clearly no.
Your father cannot possibly have lived for 7 years by spending about £2000 pa of his savings, he must have had some other source of income in that time.

It clearly isn't.

I currently only spend around £10k pa & could quite easily bring that down to £7k by cutting out various luxeries

Le_Chuck

macman wrote: »

Assuming a safe 4% return on the £200K, that generates 8K pa. Out of that you want to spend £2,400pa/£200pm on your pension contributions, and rent in London (I'm guessing minimum £400pm for that). So out of your income of £666pm, you'll have £66 left for food, transport, and all your utility bills and other overheads.
As our US cousins would say, you do the maths.

Why & why?

why?

macman

Try reading the original post-those were the parameters the OP set.
You might well be able to live on £7K pa, but Tarontis suggested that his dad lived on £2K pa-somewhat less.