Comfort Pension Level

Triumph13

Clifford_Pope wrote: »

The article included State Pension. It obviously meant £15,000 individual income, because otherwise 2 X State Pension would nearly make up the magic £15,000 without the need for any other pension whatsoever.

If that was really what it was saying then there is no crisis at all - all couples on state pensions have nothing to worry about and are perfectly content.

Reading articles on this survey on sites with a better standard of journalism (not exactly hard). it's clear that they do mean total household income, not individual income.

The survey also does not say that if you have £15k you'll be fine. It says that at this point there is a very significant shift in the proportion of people who consider themselves comfortable. That proportion continues to increase steadily until you get to about £40k pa, but the £15 to £20k category is where you see the biggest jump.

As long as you're not having to pay rent, I do think it is perfectly possible to have a frugal but happy retirement at that income level - pottering around the garden, making full use of your free bus pass (and taking a packed lunch with you), off season holidays by coach, etc. I know people who live on that income or less and are as happy as Larry. I also know others on several times that who are pemanently broke and miserable.

Cyberman60

I've never been happier and live on under 10K a year with little mortgage and spend most of the year out of the country in cheaper countries.

As a tip, I had a water meter installed which saves me nearly 300 quid a year, I have an offset mortgage so the 25% pension lump sum was handy to get my mortgage down to the low thousands, and if I get short I can always delve into the mortgage. It's a cheap equity release.

Council tax, I get a 25% discount so £1200 a year. Then I do all car, house and garden maintenance myself and get the cheapest internet deals on insurance etc that I possibly can. When out of the country I SORN the car and get road tax rebate. As I say I've never been happier and the concessions I make are well worth it !!!

BTW I retired early fifties so still have the state pension to look forward to. I have no dependents which I must admit would make a huge difference to my circumstances. My car is 15 years old and I have done less than 10,000 miles in the last 5 years.

kidmugsy

Cyberman60 wrote: »

I do all car, house and garden maintenance myself

Good for you, making use of your good-health bonus while you can.

System

Triumph13 wrote: »

Reading articles on this survey on sites with a better standard of journalism (not exactly hard). it's clear that they do mean total household income, not individual income.

.

Total household income of a couple each receiving full state pension would account for nearly all the £15,000.
If it is possible to live frugally but comfortably on that, then why is NEST for example drawing the conclusion that people need to make more private provision? The conclusion would seem to be that there is no pension crisis, indeed no need to bother saving for a pension at all, because the state pensions of a couple will be adequate.

Which is nonsense. There's some very muddled thinking going on there.

grey_gym_sock

Bootsox wrote: »

The 12,000 miles figure for motoring is obviously notional, to get an annual cost of running a vehicle. Halving the mileage won't half the cost.

sure, but £4,500 for motoring is absurd if you're trying to come up with a minimum comfortable budget for retirement.

start by living near where you actually want to spend your time, so you don't have to drive far to get there.

then, assuming you do need a car, get 1 with sensible costs (in both depreciation, and running costs). don't blindly buy the same kind of car you might have if you still had a company car.

for some ppl, cars are also a hobby. which is fine. but don't confuse that with basic living costs.

le_loup

Bootsox wrote: »

my monthly cash burn

Do people really talk like that?


Maybe if I did, I too could become a wiz-kid ... sounds exiting.

N1AK

Reaper wrote: »

The next problem is that "43% of people in that category felt financially comfortable". Or to put it another way 57% of people in the group were NOT financially comfortable.

To be fair, aside for the headline the article was mainly making the point that households with incomes below £15k were far, far, more likely to be unable to properly heat their properties and/or buy basic necessities. Thus at £15k+ your odds of living a deprived lifestyle are much lower. Sure that isn't the same thing as rolling in it, but it does emphasise that people expecting to be ok on the state pension need to reconsider and that if they can get up to £15k pa then they should at least be able to get by without having a miserable existence.

kidmugsy

It's quite cheering: a couple who can get into the £15k - £40k range ought to be in not too bad a position. Put another way, if the new style state pension gives a couple £15k p.a., anything they have saved (e.g. by way of non-state pension) puts them higher up in the £15k - £40k range, and the evidence is that they'd enjoy the extra income. They'd be wise to have an emergency fund too, though.

Has anyone resolved the question of whether they meant £15k after tax? I suppose they must have done.

N1AK

PasturesNew wrote: »

A bit of "live for today" is in order. 10 years ago I used a calculator that showed for every £100/month I pay in now, I'd get £100/month back in pension. And that would have needed me to have £100 spare every month between then and retirement - which I can't guarantee. 10 years on I doubt that would look any better.

It's probably gotten worse since then. I've heard plenty of people say that there's no point in pensions and they couldn't afford it any way; I'm not going to debate personal circumstances but I'll certainly challenge the assertion that there's no point in a pension.

Work out how much you're likely to get in retirement (with just the state pension it shouldn't be difficult) and then work out how you'd live on that. If you still think you'd rather have the money now, rather than a less awful income in retirement then knock yourself out

N1AK

kidmugsy wrote: »

It's quite cheering: a couple who can get into the £15k - £40k range ought to be in not too bad a position. Put another way, if the new style state pension gives a couple £15k p.a., anything they have saved (e.g. by way of non-state pension) puts them higher up in the £15k - £40k range, and the evidence is that they'd enjoy the extra income. They'd be wise to have an emergency fund too, though.

Has anyone resolved the question of whether they meant £15k after tax? I suppose they must have done.

I expect they mean before tax simply because that's the default for income.

One thing I find interesting is that it makes no mention of mortgages or rent. An income of £15k for a home-owner is probably equivalent to £21k for someone renting! Thus a homeowner on £14k pa is likely to be notably better off than someone renting on £16k pa.