How much to live on

Albermarle

BooJewels said:

Thanks @Albermarle - that was my thinking too.  The reading I did a few weeks ago suggested that this is a relatively short term blip in inflation and that it should come back down - perhaps jumping a bit more first after the winter.  I think, over about 10 years, a 5% average is perhaps going to be pretty close.  As I don't have any private pension provision (my husband did, but I got it back as a lump sum after he died) my main worry is what happens to state pensions - as I'd projected them forwards based on 2% increases - also being pessimistic.

In the short & medium term, the state pension is safe, as is it would be political suicide for any government to reduce it. Look at the fuss made when the very generous  triple lock was broken for one year. Older people vote much more than younger people, so...
Long term it will still exist but maybe the age when you get it will increase again and maybe other fiddling around.

BooJewels

Albermarle said:

BooJewels said:

Thanks @Albermarle - that was my thinking too.  The reading I did a few weeks ago suggested that this is a relatively short term blip in inflation and that it should come back down - perhaps jumping a bit more first after the winter.  I think, over about 10 years, a 5% average is perhaps going to be pretty close.  As I don't have any private pension provision (my husband did, but I got it back as a lump sum after he died) my main worry is what happens to state pensions - as I'd projected them forwards based on 2% increases - also being pessimistic.

In the short & medium term, the state pension is safe, as is it would be political suicide for any government to reduce it. Look at the fuss made when the very generous  triple lock was broken for one year. Older people vote much more than younger people, so...
Long term it will still exist but maybe the age when you get it will increase again and maybe other fiddling around.

I looked at this recently and it looks like any future potential age increase won't affect me now - I think I'm close enough.  The Government are obligated to review it every 6 years, after commissioning various reports on data like life expectancy etc.  And whilst life expectancy is still increasing, the rate of it has slowed significantly, so there seems to be a suggestion that it is unlikely to change before I claim it in around 5 years.  I saw one report that said the oldest people likely to find the age changing for them is those born in 1971, which I miss by a chunk.

Kim1965

My sp age is 67 (9 yrs away) any alteration upwards of that would be a body blow.
 Inflation is tipped to drop rapidly. I am fortunate to have 8k db at 60, half fully inflation oroof half up to a max of 7%rpi above which is discretionary.
 Some private db pensions have little inflation proofing and i think most annuities are level, so lets hope for most peoples sake inflation gets back on track. 
 As i am still trxing to accumulate, the current bear market is soul destroying. Both sipps are down a bit ytd. Having said that, i am currently saving approx £1400 pm, so to see it go down in spite of healthy contributions is a total bummer. Hence why im still working. 

otb666

i think the government has agreed not to change the age for people within 10 years of retirement.  I know i will feel happier next birthday when i am 57.  I took vol redundancy because our DB scheme had frozen our final salary amount based in 2019 and i worked out i would be better accumulating index linking when in payment rather than additional years.  It worked out 120k in total including severance lump sum and pension for 7 years early, i guess i could have  earnt that over 7 years instead but not when I include travel costs.  The pension scheme recently upped my annual pension from 5k to 5.5k and paid 3.5 extra lump sum so guess i am not the only one that gets confused in the nightmare calculations

Daffodil1234

As always, I find the comments on here extremely useful - thank you all for differing perspectives,

I'm currently wondering whether between my spouse and myself, we'll need to change plans so the lower earner finishes work at 60, in 2025, but the higher earner has to carry on for at least a couple of years more than we might once have thought.  I've run a few scenarios in my spreadsheet including - early death of one spouse or the other;  large unepxected spending on health issues; but things do feel quite unstable at present in the world and I know that all scenarios are massively open to change.

I find myself thinking a lot about how to get the right balance of (a) enough money for some security and (b) enough time to devote to health, energy, and wellbeing (rather than energy being used up on work).

BooJewels

otb666 said:

i think the government has agreed not to change the age for people within 10 years of retirement.  

Thank you for that - I couldn't find that written anywhere specifically - but seemed to think I'd heard it somewhere.  So I should be okay.  The only change I saw being considered was the date to move to an SPA of 68 - there was talk of bringing it forward - but that certainly won't affect me personally.

I understand your dilemma @Daffodil1234 - it's hard to plan for as yet unseen scenarios and also to strike a balance between enough pennies and quality of life.  When we were younger and projected ahead, we thought we'd be fine in our 60s - 2 x SPs, a smaller private one and the mortgage and all debts paid off.  We actually would have been pretty comfortable - the three pensions would be slightly more together than our earnings had been - but by then no mortgage etc to pay from it.  The SPA moved and pushed our retirement plans further into the future and my husband fell ill in 2018 and passed away in 2021, so everything changed (including him losing his job because of his cancer and us fighting and winning a court case) and what seemed like sensible plans 30 years ago don't work quite so well now - although it could also be a lot worse!  

I keep telling younger people not to put off thinking about this stuff until you're older, future planning when you're actually still young can really reap rewards.  The private pension my husband had was taken out in his mid 30s and was a modest contribution each month - in the early days when you were limited in how much you could pay in to one.  But I wish we'd upped it a bit more (times were tight, we couldn't really afford what we did pay) - the lump sum I got from it was significantly more than we paid in.  So even if you think you've panned well, you just don't know what's around the corner - so adding 'what ifs' into planning is good too.

Kim1965

Yep. Our planshave altered drastically, wife has been ill health retired (inoperable cancer).  I had planned to go part time, wife was going to retire at 62. Sorting the ill health pensions has been a long drawn out process and not yet completed. So i am working on at atime when i would like to spend more time at home. 

otb666

I keep meaning to set up the thing where you can pay into a pension 2k and then get the tax relief 2700, for me and hubby but i need a dummies guide on this As the extra 1400 pa would come in handy

GunJack

otb666 said:

I keep meaning to set up the thing where you can pay into a pension 2k and then get the tax relief 2700, for me and hubby but i need a dummies guide on this As the extra 1400 pa would come in handy

there's a (very) big thread over on the pensions board about it..go have a read

jevbanx1

there's a (very) big thread over on the pensions board about it..go have a read 

Is there a link please as I'm in the same situation. Thank you