How much is enough?

bigfreddiel

Often quoted is that a couple needs £15k household income for a comfortable retirement. Is that your experience?

fj

PeacefulWaters

It fits with my planning.

I reckon a couple can live comfortably on £30k, mortgage free, with enough to maintain and replace a car and spend a few weeks a year overseas.

dunstonh

£15k will be enough for some but not enough for others. Its a very personal figure. Location can have a lot to do with it as well.

hugheskevi

If that is £15K total income, then it would be the amount of single-tier State Pension for both people alone and nothing else at all. Unless the household income prior to retirement has been low, eg £22-£25K I wouldn't expect it to be enough without sacrifices.

In 2012/13, recently retired pensioner couples had a mean income of £557 per week (median=£435 p/w) net income after housing costs (Table 2.3).

So if £22,500 or thereabouts is the median after housing costs net income for a couple, I think £15,000 is a long-way short of comfortable, given it is considerably below the median. I think I'd be describing £25-30K as comfortable on the numbers above.

Thrugelmir

Quoted not so long ago that a living wage for a single person is in the region of £14k per annum.

jamesd

Median household income in retirement is around £18k but that's nationwide. If you're in a lower cost area 14k could be fine. It really depends on how much spending is in your desired lifestyle, there's no one perfect figure for all.

Living wage is often not very relevant for those in retirement because it includes a housing component that many retired people have greatly reduced through home ownership. The national living wage calculation for a single person assumes paying private rent for a one bedroom flat at the 25th percentile of the housing market rents, which ends up being £71.20 a week. The single person living wage is £16,235 a year outside London in the 2014 update, equivalent to an hourly wage requirement of £8.30. The couple living wage requirement is £22,284 a year equivalent to an hourly wage of £5.70 each. The weighted living wage is £9.20 an hour but a cap on increases each year limits it to £7.85 an hour.

Marine_life

I find it interesting that this question comes up so often but there is no effort on the part of the pension authorities / government to provide a benchmark which people can then tailor to their own circumstances.

The Australian pensions authority provides a quarterly estimate for both singles and couples distinguishing between a modest and comfortable lifestyle.

At an exchange rate of 1:2 I think these estimates are pretty fair. You can tailor the amounts for your own personal circumstances and local (UK) conditions.

kangoora

It may be worth the OP taking a look at the 'NUMBER' thread. Lots of opinions in there ranging from around the value he queried up to some people 'needing' £1k/week to retire.

https://forums.moneysavingexpert.com/discussion/2146737

Also some good examples of how to calculate living expenses in there.

Personally we're aiming for between £24k - £30k but it is very much dependent on your spending plans in retirement, debts, living expenses (i.e. a 5 bed house in the southeast costs a bit more to maintain than a 2 bed council house in Bradford ), how long before state pension kicks in etc.

PeacefulWaters

kangoora wrote: »

a 5 bed house in the southeast costs a bit more to maintain than a 2 bed council house in Bradford

Even if the south east property is mortgage free? It might be a lot closer than you suggest.

bigfreddiel

PeacefulWaters wrote: »

It fits with my planning.

I reckon a couple can live comfortably on £30k, mortgage free, with enough to maintain and replace a car and spend a few weeks a year overseas.

Actually £15k household income means exactly that - £15k and not £15k each.

Cheers

fj

PlutoinCapricorn

Many people have little income other than a basic state pension and manage: see the Mean Queen for an example of someone who in comfortable living on next to nothing!

http://meanqueen-lifeaftermoney.blogspot.co.uk/