Retirement Living Standards - what will my pension buy me?

Middlestitch

westv wrote: »

Unlike others I am quite impressed with the level of detail provided in the report. You may not agree with their budgets for each category but they explain where they come from and exactly what is included.

Just having lots of detail doesn't make something either useful or relevant.

Lifestyles are totally individual, so if anyone wants to think seriously about the sort of income they need, both during their working life and in retirement, keeping a detailed record of income and spending on a fairly basic spreadsheet is likely to be the best way to achieve something worthwhile. At least that will highlight the difference between essential and non-essential spending - a distinction which will vary from one household to another.

The longer you keep such a tally, the more closely you will be able to identify what you need - and you can then safely ignore the spurious credibility this rather silly bit of so-called research is clamouring to achieve.

moo121

Just briefly coming back to this thread to thank everyone who responded.

As I'd expect, there's a bit of variation in how people see the different levels of retirement, but it's been strangely comforting to me to read your views on it and has reassured me a little bit that my retirement should be OK really.

Thanks all.

enthusiasticsaver

moo121 wrote: »

Has anyone seen the retirement living standards?

https://www.retirementlivingstandards.org.uk

It's based on independent research by Loughborough University and has been developed to help to picture what kind of lifestyle people could have in retirement.

It sets out examples of the costs pa of several levels of retirement such as:

Minimum (£10,200 single, £15,700 couple)
Moderate (£20,200 single, £29,100 couple)
Comfortable (£33,000 single, £47,500 couple)

I wondered what people thought, are these realistic? Is this the sort of retirement you are aiming for?

We were aiming for comfortable and achieved it by 58 so retired then. My DH first and me a year later but both aged 58 at retirement.

Our current income are combined DB pensions amounting to £37578 with a further boost at SPA of 17636. We withdraw investments at the present time of £10k per annum so that puts us firmly in the comfortable category which sounds about right. We can afford 3 holidays per year - 2 short haul or UK and 1 long haul or cruise. We eat out usually at least once a week and maintain 2 cars and gift generously and have separate personal spending money amounting to around £5k per year between us for clothes, entertainment and hobbies.

Our direct debits come to £7140 although that includes membership of clubs and associations and food is around £3k per annum so we could survive on £15700 allowing for presents, entertainment and annual bills but a lot of the things we do would have to go so that would be too low for us. We could manage on the moderate level but one car would have to go and probably at least 2 holidays and the leisure club membership and separate personal spending money we both allocate ourselves would reduce and we would have to reduce the amount we gift.

It depends on the lifestyle you live when you are working I guess and how much you dislike working and whether you are willing to sacrifice some things to give up work earlier. We did not want to scrimp in retirement so we retired when we knew our lifestyle would be comfortable. Otherwise we would have continued working until 60.

fred246

Oh dear my retirement isn't very comfortable. I need to pay someone to rip out the kitchen and bathrooms and replace them, sell the cars and get some new ones and fork out a fortune on some new clothing and footwear.

Anonymous101

Middlestitch wrote: »

Just having lots of detail doesn't make something either useful or relevant.

Lifestyles are totally individual, so if anyone wants to think seriously about the sort of income they need, both during their working life and in retirement, keeping a detailed record of income and spending on a fairly basic spreadsheet is likely to be the best way to achieve something worthwhile. At least that will highlight the difference between essential and non-essential spending - a distinction which will vary from one household to another.

The longer you keep such a tally, the more closely you will be able to identify what you need - and you can then safely ignore the spurious credibility this rather silly bit of so-called research is clamouring to achieve.

I disagree on this not being useful for the reason you went on to discuss later. Granted the headline figures are useless as a guide but it does have some value. I think for the average person thinking about retirement for the first time, or attempting to plan our likely spending for the first time, this type of study is really useful.


Most people will not have budgeted in this way before and won't be used to factoring in all the likely costs. People on here are quite different to the average. I think a study of this detail gets people thinking about the costs in their lives and gives them something to adapt to their particular lifestyles.

frugal90

Nebulous2 wrote: »

I'll read it later. However it depends what you mean by realistic. Achievable?

At 57 my thoughts are turning to an early exit. Leaving now we would just about make moderate. Waiting to state retirement age we should reach comfortable. The balancing act is how much of that to sacrifice for the additional years riding bikes and touring in France / Spain.

I went at 56 and wife 51. Just finished a 2000 mile bike ride through Europe 6weeks ago. Now warm weather training in warmer climes. Targeting a triathlon next year. We have a joint gross drawdown from Sipp of 26000 for us both until I am 60. Then teachers pension kicks in. Wife has sipp of 20k per year from 55 until 60, then teachers pension. When teachers pensions both kicked in it will be just under40k gross between us, then state pension top up later.

I reckon that you have a window of opportunity when you are fit and healthy. Make the most of it. I haven't regretted it for a minute.

ex-pat_scot

Anonymous101 wrote: »

I disagree on this not being useful for the reason you went on to discuss later. Granted the headline figures are useless as a guide but it does have some value. I think for the average person thinking about retirement for the first time, or attempting to plan our likely spending for the first time, this type of study is really useful.


Most people will not have budgeted in this way before and won't be used to factoring in all the likely costs. People on here are quite different to the average. I think a study of this detail gets people thinking about the costs in their lives and gives them something to adapt to their particular lifestyles.

The value is that the level of detail (I confess I haven't read it yet) is great because it allows a comparison and tailoring to your own requirements. Otherwise you end up with a "it's not realistic" general conclusion, without a proper assessment of your own circumstances.

I do lots of coaching (informal) for colleagues and friends, who approach me to ask for help on pensions, retirement, savings, tax and general personal finance. This study is great (along with the Which? report) because it brings to life the general expectations and gives a good structure for each to consider against their own thoughts and dreams.

nigelbb

It would make more sense to compare pension to what the individual or couple were earning prior to retirement.

The target for the full basic state pension in France is to give 50% of pre-retirement income. The complementary earnings related pension (AGIRC-ARRCO) brings this up to 60-70%.

DairyQueen

Anonymous101 wrote: »

I disagree on this not being useful for the reason you went on to discuss later. Granted the headline figures are useless as a guide but it does have some value. I think for the average person thinking about retirement for the first time, or attempting to plan our likely spending for the first time, this type of study is really useful.


Most people will not have budgeted in this way before and won't be used to factoring in all the likely costs. People on here are quite different to the average. I think a study of this detail gets people thinking about the costs in their lives and gives them something to adapt to their particular lifestyles.

I agree with most of what you say but I also think that the headline figure bears some relationship to many people's reality.

As you say, this report isn't designed for seasoned MSE-ers, it's aimed at those who are less interested in, or knowledgable about, or are new to, the concept of retirement planning.

The detail on the spreadsheets is not intended to be absolute, it's intended to catalyse people into considering their own lifestyles/costs/expectations. The headline figures are intended to draw people into the concept of thinking/planning/saving for retirement.

I was interested in the spreadsheet detail. I think it's a useful 'starter for 10' and a helpful comparison/review tool for those who, like me, have already spent some years planning retirement.

Anonymous101

DairyQueen wrote: »

I agree with most of what you say but I also think that the headline figure bears some relationship to many people's reality.

As you say, this report isn't designed for seasoned MSE-ers, it's aimed at those who are less interested in, or knowledgable about, or are new to, the concept of retirement planning.

The detail on the spreadsheets is not intended to be absolute, it's intended to catalyse people into considering their own lifestyles/costs/expectations. The headline figures are intended to draw people into the concept of thinking/planning/saving for retirement.

I was interested in the spreadsheet detail. I think it's a useful 'starter for 10' and a helpful comparison/review tool for those who, like me, have already spent some years planning retirement.

On reflection I agree the headline figures will be of some use to a good proportion and I suppose if nothing else it should prompt the question of where people see themselves sitting on that scale. Salary whilst in employment will be a decent guide but the particulars of each individuals income and spending will dictate how useful.


I suppose much like the "shoot for a pension to provide 60-80% of your pre-pension income" rule of thumb its a decent start for most people. It won't suit everyone but its a good start.