How much to live on

maisie_cat

Gin_and_Milk said:

On the upside, we had potatoes yesterday that regrew having been left behind last year, this morning I'm dehydrating wild garlic from our little woodland, little things like home grown veg and the sun shining make up for decades of working in stressful offices.

Ooh, how do you dehydrate wild garlic?  There is some which grows around the corner from us every year, and every year we say we'll pick some and use it, but never really know how, so end up leaving it!

I have a dehydrator I bought years ago, before we parted company with the ancient rayburn I could dehydrate on a rack on top of it. Now I've brought the dehydrator out of the loft, but things like onion and garlic must be done in the garage, the smell fills the house otherwise. Now the garage smells lovely of course.

BooJewels

MovingForwards said:

@BooJewels just a quick one as I'm on a break:

DC pensions are based on how stocks, share etc perform.

DB pensions rise each year by upto a ?% (mine are max 5%)

Thank you for that - I assumed there must be something.  I expect a lot of people are hoping inflation falls to less than their fixed percentages then.

otb666

A lot of my colleagues went the same time as me earlier this year.as office shut,they are all very busy holidaying.  I have not taken this approach as really dont like travelling and yes worried about money.  We have been fine on 23k pa as couple. Grateful dont have to commute anymore due to petrol going up.  I have a wedding as well and I am going to hire shoes suit and hat for 4 days. 

Daffodil1234

Useful to hear your situation, otb666 -  sounds like you are doing well on £23k pa as a couple.     Similar to my situation where we are aiming for £27k pa as a couple, which seems doable but with some care / focus on spending.

hugheskevi

To explain Defined Benefit pension revaluation and indexation in a bit more detail...

Revaluation

Public sector:

• Final salary, active member, linked to final pensionable earnings. This is typically salary over last 12 months, but some schemes will look back over longer periods where salary has reduced, or increased by less than inflation to determine final pensionable earnings.
• Final salary, deferred members receive uncapped CPI increases, based on September CPI figure
• Career average active scheme members receive uncapped growth based either on CPI or average earnings depending on scheme, and also possibly with an additional amount (eg CPI+1.5%) depending on scheme rules. Increases can be negative (ie pension reduced).
  
• Career average deferred members receive uncapped CPI increases with a floor of 0% (ie increases can never be negative even if CPI is negative)
  

Private sector

• Depends on scheme rules, but for deferred members is subject to a statutory minimum for benefits in excess of Guaranteed Minimum Pension (Guaranteed Minimum Pension applies to pension accrued between 1978-97 and has its own revaluation and indexation rules).
  
• The statutory minimum is inflation capped at 5% for pension for pension accrued before 2009 and inflation capped at 2.5% for pension accrued after this date. Scheme rules determine whether revaluation is CPI or RPI and whether a cap applies.
• The statutory cap is cumulative over the period of deferment. As the caps have been higher than inflation for many years, most people will have a lot of headroom in the cap and so the current period of high inflation may well still lead to full price revaluation remaining within the cap.

Indexation

Public sector:

• Uncapped CPI for benefits in excess of Guaranteed Minimum pension
• Members who reach State Pension age after April 2016 get uncapped CPI indexation on both Guaranteed Minimum Pension and also benefits in excess of Guaranteed Minimum Pension.
  
• Members who reached State Pension age before April 2016 get uncapped CPI indexation on Guaranteed Minimum Pension, paid through a combination of the scheme and their Additional State Pension.
  

Private sector

• The graphic below from PPF Purple Book 2021 shows what schemes use. Typically benefits in excess of Guaranteed Minimum Pension accrued after 1997 get RPI indexation capped at 5%
• Benefits in excess of Guaranteed Minimum Pension accrued before 1997 usually get either no increases, a fixed rate increase or RPI increases capped at 5%.
• Members who reached State Pension age before April 2016 get uncapped CPI indexation on Guaranteed Minimum Pension, paid through a combination of the scheme and their Additional State Pension.
• Members who reach State Pension age after April 2016 probably get no indexation or only indexation of CPI up to 3% on their Guaranteed Minimum Pension.
  

Kim1965

I plan to semi/full retire in 2.5 yrs. I have decided to open minded about it.
By then inflation, war, energy, stock markets could have stabilised. Brave time to retire now in my opinion. 
 
 

Time4T_Accounts

I retired 4 years ago (at 60).  In the months leading up to it, it felt like a cliff edge.  Absolutely no regrets doing it. - but It’s a brave step to take at any time (esp. with a DC pension).

[Deleted User]

Some of you need to take a deep breath not let  some of the media hype stop you from living. Nothing like worrying to shorten your life. If you can pay the bills and have a little left over for fun stick to those plans! 
Do not leave it until you run out of tomorrows!

runningromani

Agree with @[Deleted User], wife and I retired early at Easter, did have a little wobble as date approached but having lost close family this last 2 years, friends diagnosed with cancer (fortunately both should be ok fingers crossed)  and work stressful we weighed things up again and pressed on. Essentially  it’s time verses money and we all have different views on what is right for us. Early days for us but no regrets so far. For perspective we are both 55, I have a 19k pa Civil Service pension my wife a £3k Local Government pension. We inherited a modest sum earlier this year (this was never anticipated in any planning and would have worked to 58 if this hadn’t happened, it was quick and unexpected sadly) which we will use up to £7k pa until state retirement age for fun activities and holidays (again fingers crossed) and some held back for emergencies. We have no mortgage or debts and both kids have left home with good jobs. We do run 2 cars at the moment and are careful how we spend. Hope that helps anyone contemplating retirement, again it is all down to individual views on life and income that will make your decision but a bit of comparison I found helpful as a yard stick for my planning. I wish everyone well that has retired or contemplating it and happy to share my experiences so far 🙂

drummersdale

Hi @runningromani glad to hear you have settled into your retirement - according to
My CSP I should get my pension quote next week but I’m not holding my breath!