How much to live on

helensbiggestfan

I have just been clobbered for "unpaid" tax this month too.  

I received several letters advising me I owed them money which I'm not disputing. It is tax owed on investment income so fair enough.  The amount they said I owed was consistent, however, each letter advised me a different method of how they would collect the money owed. 

I am still none the wiser.   Will just have to monitor what they do and see how it plays out, and make sure they don't charge me twice. You have to laugh though, it does seem that the right hand doesn't know what the left hand is doing.  Such ineptitude and inefficiency must cost them money, our money!!!   

Definitely no joined up thinking at play. 

If it happens again next year I will probably just pay the amount in full immediately upon receipt of the tax demand rather than agree to them taking it piecemeal.  Just keep it simple.  

helensbiggestfan

Albermarle said:

Organgrinder said:

I'm afraid in this profession you don't get to be an age where you can take a decent redundancy without working hard/getting good results etc.

The vast majority of teachers are hard working and dedicated to ensuring they get good outcomes for the students. It's why we do it.

I worked in the private sector- large companies.
When they said they were going to reduce numbers by 5%, you could be sure 9 out of 10 times who that would be. Redundancy was really a cover for weeding out problem employees. They never made good employees redundant.
Unfortunately for them the company hardly ever paid redundancy money, and just transferred them to a more junior job somewhere else in the organisation, until they got fed up and left.

 Very true. In the U.K. it is virtually impossible to get rid of someone who is unproductive or problematic so you're right, often weeding out is done under the guise of redundancy.  Which is rather sickening if they then get a nice fat redundancy package as a reward for their lacklustre performance......Crazy unfair system.  

 

Murphybear

barnstar2077 said:

[Deleted User] said:

Barnstar2077 I find it  amazing that your bills come to just £6000 a year! That also includes paying a small mortgage too! My council tax, energy, water bill and broadband come to almost that without anything else! I drive but also don’t drive or drink alcohol. Posters on here would be very interested in how that breaks down.

A £200000 pension pot would give you about £7000 a year with a 3.5% withdrawal rate assuming you take don’t the 25% tax free amount as one sum.
I suppose another alternative would be to take the tax free amount ( about £50000)  at age 57 and live on that for several years leaving the rest invested. I am not expert and just thinking aloud.
I assume your mortgage will be paid off by the time you retire.
Do you have an emergency fund and savings for extras? (Apart from the ISA)
I do not have very high savings or investments but my retirement income from July 2024 will be just over 4 times your possible £7000 and I will  continue to budget.
By the time you retire will you have paid enough NI to qualify for a full state pension?
What about spending on clothes and trips? Sorry about all the questions!

Best wishes.

I plan on taking the 25% of the pension as soon as possible, then taking the £12,570 personal tax allowance every year.  This will allow me to remove £175,700 from my pension in ten years without paying any tax, which would give me a very comfortable ten years as my outgoings are low (I probably won't even be able to spend it all!)

Then, at 67/68 I will subsidise my state pension by a few grand (amount to be determined) from the remainder of my pension until the money runs out.  Hopefully this will take another ten years or so, as £200k at 55 for my pension is the minimum I am expecting.

I extended the term of my mortgage a few years ago to maximise the amount of pension and ISA investments I could make, it is due to finish near enough on my 67th birthday.

My ISA is my only emergency fund.  If I am only going to take money out of it in an emergency then I personally don't see a reason not to keep it invested.  Meanwhile it will hopefully grow enough that when I do need a new boiler etc it will effectively be free.

As of a year from now I will have a full state pension, which I have verified on the government gateway.

Clothes wise I am a simple man, so mainly wear inexpensive jeans and t shirts, which I just pick up whenever I need new ones (which currently comes out of my £400 spending money.)

As for holidays, I like days out and recently have started going on camping trips by public transport, which has been a lot of fun.  My partner loves these as well, so that is a bonus!

The biggest potential problems are government interference, and if I do eventually move in with my partner it will no doubt increase my expenditure a lot more, as I am reasonably frugal and look for value for money in everything that I do, where as she is a weapon of massive consumption! :  )

My plan is high risk high reward as I said before, but I value my time over anything else and I have the confidence in myself that I know that I will adapt as needed.  I have the ability to drop down further in days to start my retirement later if I need to, reduce my spending money mid retirement, or even do a bit of seasonal work if I am desperate, but I don't think it would ever come to that.

You can't take it with you!

That made me smile, it sounds just like us . However over the years, (30th anniversary next year and we were both in our 40s when we met) we have both relaxed quite a bit and rarely argue over money 

Farway

helensbiggestfan said:

  Very true. In the U.K. it is virtually impossible to get rid of someone who is unproductive or problematic so you're right, often weeding out is done under the guise of redundancy.  Which is rather sickening if they then get a nice fat redundancy package as a reward for their lacklustre performance......Crazy unfair system.  

 

Even better if in the right circles, fat pay-off, golden pension & a seat in House of Lords

helensbiggestfan

Farway said:

helensbiggestfan said:

  Very true. In the U.K. it is virtually impossible to get rid of someone who is unproductive or problematic so you're right, often weeding out is done under the guise of redundancy.  Which is rather sickening if they then get a nice fat redundancy package as a reward for their lacklustre performance......Crazy unfair system.  

 

Even better if in the right circles, fat pay-off, golden pension & a seat in House of Lords

Ain't that the truth. !!!  

barnstar2077

Murphybear said:

barnstar2077 said:

[Deleted User] said:

Barnstar2077 I find it  amazing that your bills come to just £6000 a year! That also includes paying a small mortgage too! My council tax, energy, water bill and broadband come to almost that without anything else! I drive but also don’t drive or drink alcohol. Posters on here would be very interested in how that breaks down.

A £200000 pension pot would give you about £7000 a year with a 3.5% withdrawal rate assuming you take don’t the 25% tax free amount as one sum.
I suppose another alternative would be to take the tax free amount ( about £50000)  at age 57 and live on that for several years leaving the rest invested. I am not expert and just thinking aloud.
I assume your mortgage will be paid off by the time you retire.
Do you have an emergency fund and savings for extras? (Apart from the ISA)
I do not have very high savings or investments but my retirement income from July 2024 will be just over 4 times your possible £7000 and I will  continue to budget.
By the time you retire will you have paid enough NI to qualify for a full state pension?
What about spending on clothes and trips? Sorry about all the questions!

Best wishes.

I plan on taking the 25% of the pension as soon as possible, then taking the £12,570 personal tax allowance every year.  This will allow me to remove £175,700 from my pension in ten years without paying any tax, which would give me a very comfortable ten years as my outgoings are low (I probably won't even be able to spend it all!)

Then, at 67/68 I will subsidise my state pension by a few grand (amount to be determined) from the remainder of my pension until the money runs out.  Hopefully this will take another ten years or so, as £200k at 55 for my pension is the minimum I am expecting.

I extended the term of my mortgage a few years ago to maximise the amount of pension and ISA investments I could make, it is due to finish near enough on my 67th birthday.

My ISA is my only emergency fund.  If I am only going to take money out of it in an emergency then I personally don't see a reason not to keep it invested.  Meanwhile it will hopefully grow enough that when I do need a new boiler etc it will effectively be free.

As of a year from now I will have a full state pension, which I have verified on the government gateway.

Clothes wise I am a simple man, so mainly wear inexpensive jeans and t shirts, which I just pick up whenever I need new ones (which currently comes out of my £400 spending money.)

As for holidays, I like days out and recently have started going on camping trips by public transport, which has been a lot of fun.  My partner loves these as well, so that is a bonus!

The biggest potential problems are government interference, and if I do eventually move in with my partner it will no doubt increase my expenditure a lot more, as I am reasonably frugal and look for value for money in everything that I do, where as she is a weapon of massive consumption! :  )

My plan is high risk high reward as I said before, but I value my time over anything else and I have the confidence in myself that I know that I will adapt as needed.  I have the ability to drop down further in days to start my retirement later if I need to, reduce my spending money mid retirement, or even do a bit of seasonal work if I am desperate, but I don't think it would ever come to that.

You can't take it with you!

That made me smile, it sounds just like us . However over the years, (30th anniversary next year and we were both in our 40s when we met) we have both relaxed quite a bit and rarely argue over money 

Thankfully my partner has improved somewhat with regards to spending money she doesn't have, but she definitely doesn't take her work as seriously as I do, which could still throw a spanner in the works.

Once we are both in receipt of state pension we should have no worries though, so just another 25 years or so and we will be sorted! :  )

kempiejon

barnstar2077 said:

Once we are both is receipt of state pension we should have no worries though, so just another 25 years or so and we will be sorted! :  )

For ages I said that SP isn't part of my income plan as I'll be out of work long before I can get at that. 

mybestattempt

@Organgrinder and @helensbiggestfan  

Do you have an online personal tax account?

I find it useful as you can provide HMRC with your own estimates of income from various sources, update other information and monitor tax code(s) in use.

barnstar2077

kempiejon said:

barnstar2077 said:

Once we are both is receipt of state pension we should have no worries though, so just another 25 years or so and we will be sorted! :  )

For ages I said that SP isn't part of my income plan as I'll be out of work long before I can get at that. 

Yes, I plan on stopping work ages before either of us get SP as well, so that will be interesting...

Organgrinder

mybestattempt said:

@Organgrinder and @helensbiggestfan  

Do you have an online personal tax account?

I find it useful as you can provide HMRC with your own estimates of income from various sources, update other information and monitor tax code(s) in use.

I most certainly do. Not the best app in the world but nice to be able to see payments before they actually hit my bank account!