How much do I need in bank?

CLAPTON

nobby24 wrote: »

Thanks for all the replies. The reason I am asking the question is because we have approx £200,000 in savings and we are thinking of buying a property in Italy, near my daughter for approx £140,000.

PS the £1250pm is net income.

it would seem to make sense to try to live on that for a period (say a year) plus working out a detailed budget and see how you get on

if you are retaining a property in the UK, 1250 doesn't seem a lot to maintain two properties and have a reasonable lifestyle

de1amo

i have a pension income roughly the same as the OP. i have a home in the uk and abroad BUT i still have to work because the basic pension just covers the essentials--my mortgage and uk outgoings are very low and i live in Turkey which is a lot cheaper than İtaly.

i

jamesd

You wrote "we", implying a spouse. You haven't mentioned the state pension entitlements of either of you, nor the non-state pension income expectation of the spouse.

So the next thing to do is find out from the Future Pension Centre what the forecast state pensions are for each of you and when they will be paid.

At the income level you're getting now the state pensions are likely to make a very substantial difference to your income level. In your case it's entirely possible that they will take your before tax income up to £18-20,000 a year.

You also need to work out your spending, now and likely in the future if you bought the place in Italy. And you need to consider what and where you might retain a place in the UK. A house in the NE is much cheaper to buy, maintain and run than the same place in the SE. Very large amounts of money can be freed up by moves like that if you expect to live in Italy most of the time but still want a UK base. Even if you don't want to move far, downsizing now is probably a good move compared to waiting if downsizing may be needed.

You can expect to get about 5-6% of your capital as income from investments. So divide capital remaining by 20 to get possible income. That does assume the use of investments, not savings accounts, for most of the money.

You appear to have prospective income and capital that would allow most people to live very comfortably. But I don't know how much spending you're used to doing and that may not apply to you if you're used to spending far more and want to continue doing that.

At the moment your question is still comparable to asking how long a piece of string is but the suggestions here and in other posts should help you to get the information you need to answer the question.

If you're not mathematically inclined you might also want to consult an IFA to help with the calculations. Your writing "savings" instead of "investments" for £200,000 is also a worry that implies that professional help from an IFA may be of value, because savings are very inefficient for long term income generation.

nobby24

We've already started the plan by selling our house and have bought an apartment in Scarborough, this will give us £30,000+ and save us money on council tax and utility bills. I had a Jeep Grand Cherokee which did appx 26 mpg, I've replaced it with a Citroen C3 Picasso which will do over 50 mpg, road tax £30 against £460! We've put an offer on a small villa near Rome for 145,000 euros. I suppose if we struggle we can always sell a property which hopefully will increase in value. The weakness of the euro at the moment should also help.

jamesd

That's a good start. You might also wonder about using a mortgage for half of the purchase. Investments can probably pay out more than you'd pay in mortgage interest.

de1amo

the Euro isnt value at the moment imho---its weaker than it has been but still a lot stronger than the early days when a pound was worth 1,56euros as opposed to about 1,23 today----you must be aware that you are currency gambling when you purchase abroad and at the moment the euro looks very vulnerable!

CLAPTON

nobby24 wrote: »

We've already started the plan by selling our house and have bought an apartment in Scarborough, this will give us £30,000+ and save us money on council tax and utility bills. I had a Jeep Grand Cherokee which did appx 26 mpg, I've replaced it with a Citroen C3 Picasso which will do over 50 mpg, road tax £30 against £460! We've put an offer on a small villa near Rome for 145,000 euros. I suppose if we struggle we can always sell a property which hopefully will increase in value. The weakness of the euro at the moment should also help.

property price are collapsing all over europe

de1amo

The expats in Turkey all recommend people to rent somewhere before deciding to buy because of the flexibility it offers.

kidmugsy

de1amo wrote: »

The expats in Turkey all recommend people to rent somewhere before deciding to buy because of the flexibility it offers.

Excellent advice! It's what I'd do if we moved abroad, even to a country we've lived in before.

atush

I agree, I would withdraw your offer and rent a place nearby instead.

I own a home in France, but i bought it in 1991. I would not be buying now I can assure you.