How much to live on

silverwhistle

Albermarle said:

SouthCoastBoy said:

£3.90 for a pint is very reasonable these days, more like 5 or 6 around where I live

Not if you go in Wetherspoons.
Even in the more expensive parts of the UK , a typical 'non premium ' Pint is about £2.50/£3 and they usually have a couple even cheaper.

£1.99 for one of their ales for a pre-match pint there last week on the way to the ground, less a 50p off voucher..

At the local pub when I go to watch my team when they are away it's £5, but as I don't have a tv at all it's not an expense I can't afford and there is the human interaction as somebody mentioned above. As a single female I probably wouldn't go to a pub very often on my own without a specific reason, not just a hankering for a pint of Timmy Taylors..

Dazza1902

Single (widowed)almost 60, plan to go very part time (plumber) at 61, .Have indexed linked pensions payable at 60 of 10k pa, sipps and ISAs of £310 k and full sp  and mortgage free, kids all thru uni and earning more than me.

Will probs pay in another 20 k in the next year.
Reckon I need 22k to get by but 32 k pa if I want to follow cricket abroad etc.
 Not entirely sure how to play my cards ( drawdown). I think i am about there, and prepared to do some work if required.

MayDogsandCoffee

I am hoping next year is my last full year at work, with 19 months left til 60.  I have been planning on cutting down on hours but then again for the moment I can keep my saving levels higher.  Lucky to have paid mortgage off a few years back so it is just day to day living expenses and the odd emergency to think about.  No dependents but a dog and dog sport hobby that takes the money !! I have a budget spreadsheet dating back to 2016 but now really need to make sure every penny is logged to check forecasts and see how much I will need.

Albermarle

Dazza1902 said:

Single (widowed)almost 60, plan to go very part time (plumber) at 61, .Have indexed linked pensions payable at 60 of 10k pa, sipps and ISAs of £310 k and full sp  and mortgage free, kids all thru uni and earning more than me.

Will probs pay in another 20 k in the next year.
Reckon I need 22k to get by but 32 k pa if I want to follow cricket abroad etc.
 Not entirely sure how to play my cards ( drawdown). I think i am about there, and prepared to do some work if required.

Probably your first decision, will be whether to maximise the index linked pension, or take a tax free lump sum with a reduced pension. Normally you are offered a choice.  Each scheme will have its own way of calculating this, so you will need to carefully check the details of the offers.

Looking at the figures, £32K pa after tax, is possibly a bit on the high side, if you want to fairly confident of your ISA/SIPP money not running out too early, if you live to a relatively ripe old age, especially as your SIPP/ISA investments have to also keep up with inflation each year. £32Kpa before tax would be safer I guess.

Obviously if you do some part time work for a while that would help seal the deal .

Dazza1902

Albermarle said:

Dazza1902 said:

Single (widowed)almost 60, plan to go very part time (plumber) at 61, .Have indexed linked pensions payable at 60 of 10k pa, sipps and ISAs of £310 k and full sp  and mortgage free, kids all thru uni and earning more than me.

Will probs pay in another 20 k in the next year.
Reckon I need 22k to get by but 32 k pa if I want to follow cricket abroad etc.
 Not entirely sure how to play my cards ( drawdown). I think i am about there, and prepared to do some work if required.

Probably your first decision, will be whether to maximise the index linked pension, or take a tax free lump sum with a reduced pension. Normally you are offered a choice.  Each scheme will have its own way of calculating this, so you will need to carefully check the details of the offers.

Looking at the figures, £32K pa after tax, is possibly a bit on the high side, if you want to fairly confident of your ISA/SIPP money not running out too early, if you live to a relatively ripe old age, especially as your SIPP/ISA investments have to also keep up with inflation each year. £32Kpa before tax would be safer I guess.

Obviously if you do some part time work for a while that would help seal the deal .

Commutation rate is poor and I have no need for lump sums from db or sipps.
 At 61, if I work 2 days a week, I will not touch my sipp pension or savings.In all probability when I stop plumbing I will always want to do some part time work up to and possibly into state pension age. If the markets tank, I would work. I plan to get to sp age with capital largely in tact. 
 Unlike the vast majority of posters, my work has no toxic culture, office politics etc It's just hard graft and as I get older I wish to do less.

ShyAndRetiring

[Deleted User] said:

My Christmas preparations are now almost complete. Just a couple of small stocking fillers to purchase. All the decorations are up and the trees look great. The house looks nice and cosy in the evenings.

Total spend will be just under £1000 out of the Christmas and Birthdays pot. This includes buying 30 plus presents to give personally, plus another 10 to be delivered on December 23rd by M&S. 
All the cards have been sent. I saved a little by purchasing cards and wrapping paper after last Christmas. I also used some Boots points, which alongside their other offers, were most useful.

The cost of the Christmas food is shared by all those present, (14 for Christmas lunch) who also all contribute one dish to the main meal. My £50 of nectar points will take care of most of my share.

I also have to top up the car. I like to have a full tank over the Christmas period just in a case something crops up.

I may look at purchasing a Christmas outfit depending on price and availability, although I do have enough Christmas jumpers lol!

After a very tough 3 months we are looking forward to the Christmas season very much.

This is all very well organized and useful to know what kind of numbers work for people at what can be an expensive time of year. I did the 52 week savings challenge for this year’s Christmas prep which gave us £1378. This is doable and feels like a healthy budget to allow for a few extras or unexpecteds, and things like you mention, eg: a full tank in the car for driving others about as needed.

Importantly, in relation to this thread, for us the last few months have been all about pinning down the answer to the ‘how much to live on’ question as we make a major life adjustment. Coming at this time of year, it’s shown us that having a pot, whether by saving for 52 weeks of the year or having a lump put aside for Xmas, is essential so that we don’t go off track and can still enjoy festive times with family and friends, Of course some of the fun won’t cost a bean, but good to have funds also for expense as needed, so the fund for 2025 is already up and running.

Useful and timely info for us, thank you S&R x

ShyAndRetiring

As I’ve delurked myself in the previous post, I’ll share my how much to live on context. 

With the diagnosis of a lifelong condition in 2011, last 13 years have been a struggle healthwise but I’ve always carried on working in some capacity. However, 2024 has made me realise I can’t keep struggling on, the effect on my health and well-being, in the last 3 years particularly, has been shocking. 

Happily though, the benefit of having kept going, along with having a FIRE focus and saving furiously, means the numbers actually can add up for taking an early retirement (probably with something part-time when I recover a bit from recent flare up of illness): we can have enough to live on in a careful but comfortable way.

Now, I’ve lurked on the How Much to Live On thread for a long while now, along with The Number thread in the pensions forum so I’m very aware that ‘comfortable’ is subjective.   I also know that what OH and I require for a lifestyle we’re comfortable with is nothing like the definition of comfortable offered in the Retirement Living Standards etc.

The following is where we’re at, as posted on my thread. @Organgrinder kindly shared the detail of how this compares with the general population and @[Deleted User] kindly shared how this compares with his own income in retirement, plus there is this fab thread for comparison, all of which is interesting and welcome. OH is several years older than I am and is already retired, with small but sufficient occupational pension and State Pension (not full due to his previous life before we met).

So, how much to live on looks like this … 

  Short-term: 2025 - a stretched year!
Without my wages but supplementing through my SHTF savings   our income will be £18k net approx. This is doable for us (the budget is drawn up) and is probably at the hey-it’s-only-for-a-year end of comfortable! 

However we value the time way more than the fiscal benefits which come at a significant cost of stress and health impact, which are considerable in the job I’m leaving, so I’m confident we’ll gain more in other ways. As mentioned, when my health improves I’ll hope to boost our income with small freelance projects, working from home.

    Mid & long across 2026 - 2032
I’ll access 2 occupational pensions without penalty when I hit 60 in 2026  These years will be the gap years to my State Pension - accessing occupational pensions + drawing down a smaller amount from the TFLS and then accessing my current NEST pension later on. 

During this time we’ll be on a much more comfortable £24k net approx.

The great thing about this is we’ll have more flexibility (and fun) in the budget BUT if we need a money-saving couple of months, we can drop back to the 2025 budget without too much hassle. Obviously the cost of living will affect this too, but I always run two budget options - preferred budget and a bare bones (contingency) budget which I review every 6 months, so we’ll always have a frugal fall-back if we need it.

  2033 and Beyond
I’ve checked and am on track for a full State Pension from 2033. Once we have both State Pensions and as well as occupational pensions, we should have approx £28k net.

In the background for our future finances:
* We have a fairly healthy 5-figure emergency fund (ISA, Premium Bonds and Savings). This is all separate to my SHTF savings which have been saved for the eventuality of having to stop work before pensions kick in. 

* We’re thankfully mortgage-free, so we have the capacity to sell up and downsize to free up additional funds. Our home is small and we’ve already future-proofed it as much as possible.
* Importantly also, we’ve run the numbers so that if something happens to either of us sooner or later, the other will have enough to live on, again in a way that’s comfortable for us on that lower income.

  I do want to say that I’ve followed this thread from the start and without doubt, every contributor here has over the years inspired ideas, offered pointers or made a comment which resulted in me having a thought or taking an action which has helped us get to the point where the numbers add up enough for me to take breathing space in 2025. Thanks to all of you, S&R x

Organgrinder

ShyAndRetiring said:

As I’ve delurked myself in the previous post, I’ll share my how much to live on context. 

With the diagnosis of a lifelong condition in 2011, last 13 years have been a struggle healthwise but I’ve always carried on working in some capacity. However, 2024 has made me realise I can’t keep struggling on, the effect on my health and well-being, in the last 3 years particularly, has been shocking. 

Happily though, the benefit of having kept going, along with having a FIRE focus and saving furiously, means the numbers actually can add up for taking an early retirement (probably with something part-time when I recover a bit from recent flare up of illness): we can have enough to live on in a careful but comfortable way.

Now, I’ve lurked on the How Much to Live On thread for a long while now, along with The Number thread in the pensions forum so I’m very aware that ‘comfortable’ is subjective.   I also know that what OH and I require for a lifestyle we’re comfortable with is nothing like the definition of comfortable offered in the Retirement Living Standards etc.

The following is where we’re at, as posted on my thread. @Organgrinder kindly shared the detail of how this compares with the general population and @[Deleted User] kindly shared how this compares with his own income in retirement, plus there is this fab thread for comparison, all of which is interesting and welcome. OH is several years older than I am and is already retired, with small but sufficient occupational pension and State Pension (not full due to his previous life before we met).

So, how much to live on looks like this … 

  Short-term: 2025 - a stretched year!
Without my wages but supplementing through my SHTF savings   our income will be £18k net approx. This is doable for us (the budget is drawn up) and is probably at the hey-it’s-only-for-a-year end of comfortable! 

However we value the time way more than the fiscal benefits which come at a significant cost of stress and health impact, which are considerable in the job I’m leaving, so I’m confident we’ll gain more in other ways. As mentioned, when my health improves I’ll hope to boost our income with small freelance projects, working from home.

    Mid & long across 2026 - 2032
I’ll access 2 occupational pensions without penalty when I hit 60 in 2026  These years will be the gap years to my State Pension - accessing occupational pensions + drawing down a smaller amount from the TFLS and then accessing my current NEST pension later on. 

During this time we’ll be on a much more comfortable £24k net approx.

The great thing about this is we’ll have more flexibility (and fun) in the budget BUT if we need a money-saving couple of months, we can drop back to the 2025 budget without too much hassle. Obviously the cost of living will affect this too, but I always run two budget options - preferred budget and a bare bones (contingency) budget which I review every 6 months, so we’ll always have a frugal fall-back if we need it.

  2033 and Beyond
I’ve checked and am on track for a full State Pension from 2033. Once we have both State Pensions and as well as occupational pensions, we should have approx £28k net.

In the background for our future finances:
* We have a fairly healthy 5-figure emergency fund (ISA, Premium Bonds and Savings). This is all separate to my SHTF savings which have been saved for the eventuality of having to stop work before pensions kick in. 

* We’re thankfully mortgage-free, so we have the capacity to sell up and downsize to free up additional funds. Our home is small and we’ve already future-proofed it as much as possible.
* Importantly also, we’ve run the numbers so that if something happens to either of us sooner or later, the other will have enough to live on, again in a way that’s comfortable for us on that lower income.

  I do want to say that I’ve followed this thread from the start and without doubt, every contributor here has over the years inspired ideas, offered pointers or made a comment which resulted in me having a thought or taking an action which has helped us get to the point where the numbers add up enough for me to take breathing space in 2025. Thanks to all of you, S&R x

In case you haven't seen or used it, the guiide website is a great way of assessing your income, pensions and savings against what you need. 

I used it as a sanity check against my own calculations and they came out almost identical which was nice.

MSE in general also has some great free ways of getting extra cash. I know not everyone wishes to do them but I think there's over £800 of bank switching offers around at the moment. Plus there are lots of discounts to be had using Quidco etc.

Also don't forget you can move savings into pensions even if retired up to £2880 net which HMRC will top up to £3600 a year. In your case (I'm guessing here) this could be very beneficial as you may not pay any tax on drawdown, effectively getting £720 for doing very little!

Good luck with your plans.

Albermarle

Also don't forget you can move savings into pensions even if retired up to £2880 net which HMRC will top up to £3600 a year. In your case (I'm guessing here) this could be very beneficial as you may not pay any tax on drawdown, effectively getting £720 for doing very little!

Shy and Retiring looks like they will be a taxpayer within a year or so of retiring. So the benefit will only be £180. 

£2880 added - £720 tax relief added = £3600.

Take 25% tax free =  £900 and 20% tax on the rest leaves £2160.
£2160 + £900 = £3060 , so a gain of £180 over the original £2880. 

Organgrinder

Albermarle said:

Also don't forget you can move savings into pensions even if retired up to £2880 net which HMRC will top up to £3600 a year. In your case (I'm guessing here) this could be very beneficial as you may not pay any tax on drawdown, effectively getting £720 for doing very little!

Shy and Retiring looks like they will be a taxpayer within a year or so of retiring. So the benefit will only be £180. 

£2880 added - £720 tax relief added = £3600.

Take 25% tax free =  £900 and 20% tax on the rest leaves £2160.
£2160 + £900 = £3060 , so a gain of £180 over the original £2880. 

Still worth it in year 1 though. 

I'm planning on doing it for whenever I retire to 75 if I can even though the benefit is small .... Say 13 years. Why not...it's free money!