Retirement Living Standards - what will my pension buy me?

Triumph13

I'm afraid anything that defines a 'comfortable' lifestyle as requiring way in excess of the median income needs to be taken with a barrow-load of salt.

westv

I noticed that, in the detailed breakdown, the holiday was taken with Thomas Cook!

westv

Triumph13 wrote: »

I'm afraid anything that defines a 'comfortable' lifestyle as requiring way in excess of the median income needs to be taken with a barrow-load of salt.

To be fair to the University they do provide a detailed breakdown of what the money would be spent on.

molerat

westv wrote: »

To be fair to the University they do provide a detailed breakdown of what the money would be spent on.

But there are a lot of spends they do not cover. £6K a year on fags - 20 a day each for a couple - will make a massive difference to what else you can spend on.

molerat

missile wrote: »

The only people who will benefit from this study are those paid to carry it out.

And those that paid to have it carried out. Load of !!!!!!!!, "independent" research for a pension industry organisation which basically hints that you need to put more money into your pension.

westv

molerat wrote: »

But there are a lot of spends they do not cover. £6K a year on fags - 20 a day each for a couple - will make a massive difference to what else you can spend on.

Why would they cover that when most people don't smoke? You can't cover everything.

molerat

westv wrote: »

Why would they cover that when most people don't smoke? You can't cover everything.

Agreed, that is why the whole illustrative exercise is pointless. Smoking can cost more than running a reasonable car but a car is included in their figures. And then some spend £100 down the pub.

Triumph13

westv wrote: »

To be fair to the University they do provide a detailed breakdown of what the money would be spent on.

They do, but the underlying problem is that they set it at a level of expenditure that means the vast majority of the UK population are, by definition, not living a 'comfortable' lifestyle. The vast majority of the UK are living on considerably less and paying rent or mortgages out of it.
Either they started top down from a definition that the huge majority have uncomfortable lifestyles (!) then looked what those above that level spent all their money on, or they built bottom up and didn't notice that all their assumptions added up to a stupid answer of only a small fraction of people being 'comfortable'.

michaels

My concern with such numbers is they often assume retirement income needs to increase with prices. With a 40 year retirement starting at median earnings and growing with RPI would see you in one of a he lowest deciles after a couple of decades based on past experience.

k6chris

"Like the ‘five a day’ or 5-a-day healthy eating maxim, the PLSA hopes the Standards will one day become a rule of thumb for retirement planning. Roughly speaking, a single person will need about £10k a year to achieve the minimum living standard, £20k a year for moderate, and £30k a year for comfortable. Like 5-a-day, this can be briefly summarised as 10k-20k-30k. For couples, it's 15k-30k-45k"


Brilliant, right up until inflation is added and 10k-20k-30k becomes 10.5k-21k-31.6k. Your future self is not going to be happy arriving at retirement in 15 years time, expecting 20k pa to provide the suggested level of retirement! Academic nonsense at its worst.