Is £200k enough to live on?

macman

redpin wrote: »

if your not working, i dont think you pay tax? so those savings accounts providing 4.08% for 2 years etc will give you that tax free

What? Yes you do, if your income is above the tax threshold.
The only tax free Saving Accounts are ISA's and National Savings Certs.

ada1988

I think no matter how much money it is,it depends on the attitude for life.that will be more important.
you will be happy with little money but having a good attitude.

tco03

I would buy £100k of gold bullion in 10-50g bars
live off the remaining 100k then cash in the gold piece by piece as and when i needed it.
Obviously a secure storage solution is needed though!
(I heard of a farmer that did something similar painting his gold black and leaving it outside LOL)
Gold wont fall foul of depreciation unless it was discovered in abundance somewhere... unlikely

cepheus

If savings keep up with your personal inflation rate, simply divide the number of years you expect to need an income into 200K to get the income per year in todays terms. Don't expect interest from a safe savings account to earn anything above inflation, in other words you really don't get a real return on your savings without risk.

So if you have 15 years until your pension and you can survive on your pension after that, your income will be £13,300 per year. However, unless you have built the 200k in a tax free wrapper over the years there will be tax to come out of that! It depends on how allowances change into the future, but for a single person you should get around £12,200 at the moment outside cash ISAs and National Savings certificates.

Anything else other than a savings account will involve risk and potential further erosion of capital, so only invest in risky products if you don't really need it.

geoffky

I retired at 40 and we are mortgage free and we reckon we live on around £800pm but things do pop up as extras often so probably more like we live off £1100pm..we do not drink or buy the latest fashion ect ect .we drive a big gas guzzler (24mg) as well

duchy

I think it all swings on what rent if any is paid -or if a property is bought -that's going to drastically reduce the capital. Either way that needs to be taken into account. Also if this person moved away from London would that impact on availability of the type of part time work they could do ?

As there's an interest in academic interests -maybe the way around it would be to buy a property within reasonable proximity of a decent university and rent out a room to a student -so regular income and access to facilities (and more likely likeminded people) but the whole of the summer vac the house to themselves (and probably Easter and Christmas too) however if one is used to living in London -it's a bit of a culture shock moving away.

My brother had an inheritence and used it to fund a very decent deposit on a house in Norwich where he'd just started as a mature student-he lived there himself and rented out the other rooms -as people left uni others moved in usually friends of the departing tenents -and even after he'd finished himself he was able to keep rolling on without actively looking for tenents after he moved back to London for a couple of years so the student market is a fairly reliable one and may meet other needs like proximity to interests. Obviously some university towns are cheaper than others property-wise.

SunnySusie

Inflation will surely be what makes this impossible? You will be getting a 3-4% pay cut each year, and if the government keeps printing money, thus devaluing our currency further, what is clearly already a struggle will fast become impossible.

But I like the idea of buying a property with some spare rooms and then using eg airbnb to make enough to pay the monthly bills.