The cost of living

fatbeetle

As a corollary to my other thread, but please treat this as fun, we know everybody's needs and standards are different

My wife and I are looking at the possibility of early retirement, back to the UK, and trying to calculate how much income we'd need to be comfortable in the UK. We've no dependent kids.

We'd have a house, with no mortgage on it, in Cornwall. We will both have supperannuations.

How much income (monthly/annually,) do you need to have a reasonable lifestyle in the UK? We're happy with a second hand car and don't take expensive holidays etc, just a reasonable standard of living. Gym membership, occasional meals out are our spends.

We've been told by friends who are in similar situations to us that they live comfortably on a joint net monthly income of £2500

Any clues? Thoughts? Advice?

What do you need to get by?

RickyB2000

Without a mortgage, I would say around £20k net a year is easy to do.

jamesd

The median average income for retired households in the UK is about £18,000. Without car and lots of eating out or holidays £12,000 should be sufficient.

Some ideas for some possible core annual costs in that area, erring on the high side, would be:

£2000 Food and household consumables, much less is possible
£1500 Council tax (property tax)
£1200 Gas & electricity
£600 Water
£350 Property insurance
£146 TV license
£200-400 30-150 megabit/s internet
£170 basic Android mobile phone and low data use package, unlimited texts, limited included calls
£150 Landline phone

£500-900 cable or satellite for extra TV stations beyond broadcast depending on source and channel selection

robin61

fatbeetle wrote: »

We've been told by friends who are in similar situations to us that they live comfortably on a joint net monthly income of £2500

Any clues? Thoughts? Advice?

What do you need to get by?

I think our expectations sound similar to yours. We are also aiming for a net income of £2.5k per month. It is slightly more than what we live on currently due to the significant extra contribution I am currently putting into my pension scheme to enable early retirement.
So we are therefore very confident that this amount is comfortable for us when I stop working. I am not expecting our expenditure will be significantly different once we retire.I work from home so do not have the expense of commuting or the other normal work related expenses.

Of course others will disagree. I have no doubt many live OK on less and others would consider this amount a pittance.

Wednesday2000

RickyB2000 wrote: »

Without a mortgage, I would say around £20k net a year is easy to do.

I would think the same.

peterg1965

Crikey, I am targeting £60k of pension income not including State Pensions. I am thinking something like £4500 minimum as a joint income, maybe supplemented with some additional part time work or stay at home business to keep me occupied for a portion of the day.

Perhaps the reason I have this figure in mind is that I expect to carry forward a modest mortgage into retirement and I also have a penchant for nice cars! I also want us to maintain the same, if not better, standard of living.

Fortunately the basis for this figure is two DB pensions which should get us 75% towards the desired sum. Target is 2022-2024.

bouicca21

If I had to give up my luxuries - the car, the gym, the cleaner, regular meals out and holidays - I could probably manage on the state pension alone as I have no mortgage. Fortunately I have a db pension and life doesn't have to be that dreary. I reckon a reasonably comfortable lifestyle for a single person needs around £1300 a month after tax, more is obviously better, especially if you have a penchant for nice holidays.

But what is equally important is having some capital so that sudden emergencies - need a new washing machine or freezer for example - don't have to be paid out of income.

HappyMJ

jamesd wrote: »

The median average income for retired households in the UK is about £18,000. Without car and lots of eating out or holidays £12,000 should be sufficient.

Some ideas for some possible core annual costs in that area, erring on the high side, would be:

£2000 Food and household consumables, much less is possible
£1500 Council tax (property tax)
£1200 Gas & electricity
£600 Water
£350 Property insurance
£146 TV license
£200-400 30-150 megabit/s internet
£170 basic Android mobile phone and low data use package, unlimited texts, limited included calls
£150 Landline phone

£500-900 cable or satellite for extra TV stations beyond broadcast depending on source and channel selection

That's perfect jamesd so therefore as pension credit pays £1,000 per month I don't need to save anything at all into a private pension and I will have more than enough to retire on....and I don't even have half of those expenses you've listed. My total communications bill including home phone with unlimited calls, three mobiles one with a very good allowance, high speed unlimited broadband, unlimited on demand films and TV programs on catch up come to £250 per year. My gas/electricity is half that and I don't pay property insurance.

We can easily live on £12,000 (net) today and we do go out to the pub a couple of times a week, eat out at least once a week and go on very regular day trips. I'm not interested in foreign holidays.

I don't have a car but I do live in an area which is well served by public transport and taxi's are cheap when public transport is not appropriate.

I've also got access to emergency funds (around £10,000) should the need arise.

missbiggles1

HappyMJ wrote: »

That's perfect jamesd so therefore as pension credit pays £1,000 per month I don't need to save anything at all into a private pension and I will have more than enough to retire on....and I don't even have half of those expenses you've listed. My total communications bill including home phone with unlimited calls, three mobiles one with a very good allowance, high speed unlimited broadband, unlimited on demand films and TV programs on catch up come to £250 per year. My gas/electricity is half that and I don't pay property insurance.

We can easily live on £12,000 (net) today and we do go out to the pub a couple of times a week, eat out at least once a week and go on very regular day trips. I'm not interested in foreign holidays.

I don't have a car but I do live in an area which is well served by public transport and taxi's are cheap when public transport is not appropriate.

I've also got access to emergency funds (around £10,000) should the need arise.

Given that pension credit's about to disappear and that if you were on your own even that would be much lower, I think that's a very risky strategy.

mark5

jamesd wrote: »

The median average income for retired households in the UK is about £18,000. Without car and lots of eating out or holidays £12,000 should be sufficient.

Some ideas for some possible core annual costs in that area, erring on the high side, would be:

£2000 Food and household consumables, much less is possible
£1500 Council tax (property tax)
£1200 Gas & electricity
£600 Water
£350 Property insurance
£146 TV license
£200-400 30-150 megabit/s internet
£170 basic Android mobile phone and low data use package, unlimited texts, limited included calls
£150 Landline phone

£500-900 cable or satellite for extra TV stations beyond broadcast depending on source and channel selection

For my wife and myself food and household consumables would be much higher, more than double that figure but I understand you can do it a lot cheaper.

Electric and gas I would put higher especially for a retired couple who are home a lot more.

Council tax again I pay more but it depends on the area and banding.

Car wise, tax, insurance, mot, tyres, servicing, fuel.(500-2000 per year?)

The house will you be able to wash the windows and maintain the garden as you get older, maybe add £25 per month for this.

robin61

peterg1965 wrote: »

Perhaps the reason I have this figure in mind is that I expect to carry forward a modest mortgage into retirement and I also have a penchant for nice cars! I also want us to maintain the same, if not better, standard of living..

Yep no mortgage is a great help even psychologically it' s nice to think it' s out of the way with. Cars can depreciate like mad so liking them can be an expensive hobby.