How much to live on

Albermarle

Billy-no-Money said:

Thanks @Albermarle, even if the final numbers aren’t quite at that level they won’t be far off.

The point is that someone with debts is likely to deprioritise their pension, while I never had that choice and thank goodness I didn’t. I had very poor knowledge about managing money, but was protected from my own mistakes by the way things were done back then!

This is very true. In the past if you worked for a decent/larger private employer, you got enrolled in their DB scheme, most likely without understanding it/appreciating the value of it. Then you get the big benefit 30 years+ later.
On the other hand a large number of lower paid workers working in smaller firms, had no pension at all, until auto enrolment forced their employer to offer it/pay into one , albeit a small amount in most cases.
Public sector workers remain 'protected' although in the same way as you were, many of them do not really understand or appreciate how good their pension benefit is.

Arthurian

Albermarle said:

This retirement living standards survey quotes £20K pa for a couple as a minimum, although this has been recently  updated to take account of current inflation. If you take £1500 a month and add 10% for inflation, it is approx  £20Kpa .How it gets to that figure ( and all the other figures) can be quibbled with, as of course everyone has different needs.


Home - PLSA - Retirement Living Standards

Just for interest, this link

https://www.retirementlivingstandards.org.uk/How-to-estimate-likely-RLS.pdf

is the same survey but from February 2021.

Savvy_Sue

Albermarle said:

Billy-no-Money said:

Thanks @Albermarle, even if the final numbers aren’t quite at that level they won’t be far off.

The point is that someone with debts is likely to deprioritise their pension, while I never had that choice and thank goodness I didn’t. I had very poor knowledge about managing money, but was protected from my own mistakes by the way things were done back then!

This is very true. In the past if you worked for a decent/larger private employer, you got enrolled in their DB scheme, most likely without understanding it/appreciating the value of it. Then you get the big benefit 30 years+ later.
On the other hand a large number of lower paid workers working in smaller firms, had no pension at all, until auto enrolment forced their employer to offer it/pay into one , albeit a small amount in most cases.
Public sector workers remain 'protected' although in the same way as you were, many of them do not really understand or appreciate how good their pension benefit is.

And a certain percentage of those lower paid workers - especially those juggling multiple jobs - will be below the level at which they HAVE to be auto-enrolled, and will likely choose not to be even if the offer is made, or will opt out because every £ now is so vital. But that's probably a rant for elsewhere ... 

Albermarle

Savvy_Sue said:

Albermarle said:

Billy-no-Money said:

Thanks @Albermarle, even if the final numbers aren’t quite at that level they won’t be far off.

The point is that someone with debts is likely to deprioritise their pension, while I never had that choice and thank goodness I didn’t. I had very poor knowledge about managing money, but was protected from my own mistakes by the way things were done back then!

This is very true. In the past if you worked for a decent/larger private employer, you got enrolled in their DB scheme, most likely without understanding it/appreciating the value of it. Then you get the big benefit 30 years+ later.
On the other hand a large number of lower paid workers working in smaller firms, had no pension at all, until auto enrolment forced their employer to offer it/pay into one , albeit a small amount in most cases.
Public sector workers remain 'protected' although in the same way as you were, many of them do not really understand or appreciate how good their pension benefit is.

And a certain percentage of those lower paid workers - especially those juggling multiple jobs - will be below the level at which they HAVE to be auto-enrolled, and will likely choose not to be even if the offer is made, or will opt out because every £ now is so vital. But that's probably a rant for elsewhere ... 

Very true and note the following extract from a BBC news article.

Workers can opt in to the pension saving scheme when they earn more than £6,240, but the SMF suggestion to cancel the earnings threshold follows similar calls from pension providers.

"This will help many people who are multiple jobbers but where each individual job falls below the current £10,000 threshold, so won't enjoy the benefits of auto-enrolment. This includes many women."

The government said that it was planning to abolish the lower earnings limit, and cut the age for automatic enrolment from 22 to 18 by the mid-2020s.

[Deleted User]

Good morning. This will be my last post until April 9th as I take my traditional Lenten break from the forums.

Financially, events progress as planned. Car insurance came in under budget by some £40. March tends to be more expensive for me with car service, MOT and house insurance payments due. However, these have all been budgeted for in the annual bills account.

Holiday regular saver already contains enough to pay final amounts for the villa, spending money and flights to Cyprus in late August.

Part of the rear garden is having a new fence, but this will come out of housing maintenance budget and will cost about £500.

I have been more disciplined with personal spends these past two months and they are now just under £200 a month. By personal I mean things like meals out, haircut, and books. Most other spends are part of some other budget. As I do not drink alcohol or smoke my personal spends are quite modest.

Savings from my part time employment are looking good. My aim is to save another £8000 between now and August when I finally enter full retirement. If I finish earlier it will just be a little less. Hoping to have a total of £40000 in bonds, cash and investments by that time.

State pension is due in July 2024. This will be almost the full new pension minus a few pence. I need to pay NI up to April 2024 to achieve that total. 22/23 will be a full year as result of employment. I will need to pay some voluntary NI in 2023/2024 to ensure my final NI year is full. (47 years in total owing to being contracted out)

Well quite a busy day ahead with car to clean and a large family lunch. Back to school tomorrow after half term too. I did spend one day in school preparing and sorting things. Also caught up with some friends who I had not seen for years.

Best wishes to all of you. Looking forward to returning in April to read updates as well as the plans of new posters.

Blackcats

Thank you @[Deleted User] for pointing me in the direction of this thread.  It's a really interesting read - I'm only up to page 20 but it's nice to see how people plan for and enjoy their retirements.

I went to part-time working in October (2 days per week) and at the same time started drawing one of my pensions.   The pension was reduced as I'm not yet 60 but for me the reduction in £'s is far outweighed by the gift of time to do the things we want to do.

my part-time contract is until 30th June so I won't know the exact retirement income figures until then because of tax across my income streams.  

In October I can review my options based on the Macleod ruling for my smaller public sector pension and in February 2024 OH will get his state pension.  So I feel that this is definitely a semi retirement phase and our income will change over the next few months.

According to my state pension forecast 22/23 is the last year I need to contribute in order to have full state pension .....eventually 🙃

silverwhistle

Savvy_Sue said:

And a certain percentage of those lower paid workers - especially those juggling multiple jobs - will be below the level at which they HAVE to be auto-enrolled, and will likely choose not to be even if the offer is made, or will opt out because every £ now is so vital. But that's probably a rant for elsewhere ... 

.. or worked at a number of jobs where they made contributions but below de minimis levels. Over a few years I worked part time at 4 FE colleges and the ONS (Civil Service) and now I need to get myself motivated to claim the contributions back. In addition  part time work as a relief social worker where luckily I'd kept a few payslips which showed I didn't contribute so at least no paperwork to complete!

Then I pootled off abroad to teach TEFL which was a lot more interesting if hardly financially rewarding. Thank goodness I had 25 years with the leccy board in IT and also bought into the share save scheme!

When I get round to it I suspect the returned contributions will help pay for a slap up weekend in Scarborough.

louby40

I used to post a lot on the MSE forums when I was paying off debt after a relationship split. 10 years later the debt has gone and at 54 I'm looking towards retirement now. I found this board having been directed from it on a replacement TES board.

I had cancer in 2021 and ongoing treatment until March 2022 & having a cancer diagnosis has  definitely changed my mindset. My teaching job has also been changed because of a separate ongoing additional health worry so school hasn't been the happy place it once was. I don't enjoy my job as much as I used to. 

Anyway, my situation is this,  I live with my DP and adult son who's currently on an apprenticeship. My partners finances are separate to mine (no wish to combine them after being burnt in a previous relationship) he contributes to the bills however. The house we live in is mine.

My current teachers pension statement says if I retire at 60 I get £31k lump sum and £17k a year pension. I don't want to work until I'm 60!  My house is worth about £250k with 9 years left on the mortgage and £64k remaining to pay. I'm currently overpaying my mortgage. I don't have any debt and my car is paid for but will probably need replacing in the next 3-5 years. I have a small emergency fund of about £2k but no other savings.
I also have a small LGP that has a £3k lump sum and about £1200 a year pension & that will become payable when I'm 60, in 2029.

My SP of £9k a year will be paid when I'm 67.

My current dilemma is whether to sell my house and downsize (it's a 4 bed town house) so that I can pay off my mortgage OR stay in the house (which I love and is just how I want it) and then downsize when my remaining mortgage is £30k and use my lump sum to pay it off. I would then have a decent chunk of equity to invest and live off along with my teachers pension.

2 bedroom houses where we live in the North West are anything from £120-£180k in a decent area.

I have an appointment with a Weslyan pension advisor in April to find out how much I'd get if I retired earlier.

Albermarle

My current teachers pension statement says if I retire at 60 I get £31k lump sum and £17k a year pension. I don't want to work until I'm 60! 

I am not an expert on the TPS, but with most of these types of schemes you can take them early, with a reduced lump sum and annual pension. You do not really lose out, you just get a lower pension for more years. Suggest you have a good read of the TPS website. Also if you need more specific advice on TPS, you can post your question in the Pensions forum.

I have a small emergency fund of about £2k but no other savings.

Ideally you should have a bit more than this in available cash.

My SP of £9k a year will be paid when I'm 67. The good thing is that your SP and your teachers pension will keep increasing with inflation, which is a very good benefit. The SP has increased from April to over £10K pa.

My current dilemma is whether to sell my house and downsize (it's a 4 bed town house) so that I can pay off my mortgage OR stay in the house (which I love and is just how I want i

Be aware that downsizing is not always as easy as it seems. When you start looking at cheaper/smaller houses they will probably seem a bit small, and not as nice as where you live now. As a compensation you may start looking at a nicer location, with a sea view maybe, or a bungalow, and in the end the money you release by downsizing is less than expected.

I have an appointment with a Weslyan pension advisor in April to find out how much I'd get if I retired earlier.

Not clear why you need to pay a pension advisor to find out something you could easily find out yourself. Pension advisors are usually more useful for people with DC pensions, where the money is invested.

louby40

Hi thanks for your advice. Pension advice from the Weslyan is free. Because my teachers pension is a combination of final salary  and career average schemes, when you access the calculators on the TPS website (of which I'm extremely familiar with) it can't always calculate what the pension amount would be if I took it early. It's a bit of a pain with the website. The Weslyan advisor have some sort of  program that can work it out for you. 

I did have more savings but during my chemo treatment and time off sick  my salary went down to half pay so I did have to dip into that.I'm now working on building that back up.