How much to live on

jackieblack

LL_USS said:

I have just realised sometimes we may think "wow, that person on MSE does so well, I wish I had done that (stoozing, switching, investing....) so long ago". In fact, it's not late whatever stage as we get on this forum (or any online communities like this), it means we start to want to put our money affair in (a better) order, or realise we want to do something more to improve our situation. 

Similar to tree planting... the best time to plant a tree was twenty years ago, but the next best time is today 🙂

Shimrod

Durban said:

Organgrinder said:

Nebulous2 said:

I keep a spreadsheet of all my live cash accounts, bank accounts, regular savers, deducting any credit card debt, which I complete on the 1st of the month. The difference in the total shows if I'm up or down since last month. I've spent £700 more than my income this month, but that includes a hefty annual bill - vehicle insurance - a big payment towards our next holiday and some credit card fees for stoozing. I'm quite happy with that, I expected it to be more. 

I've got 3 new credit cards in the last 2 months, two BT cards, that I've turned into cash. Chase is giving me 4.8% for 6 months, so I'm ahead on that. The third is a purchase card, so I'll put much of my expenditure on that, leaving more money to gain interest. Now the fees are paid on the credit cards the interest each month will supplement my income. 

Gosh this sounds so much like me! I have a couple of deals ending in September and another in January. These total some £23k. In addition I have two more ending this time next year. Only £4k on them currently but they should go up to about £15k before they finish.

I've done another big refresh of everything as our mortgage deal ends in January and I want to make sure I know which ISAs need to be cashed in etc.

All looking good and still very much on track for retirement in just over two years.

I finally got round to getting new glasses. My left eye has deteriorated somewhat. But £184 for two pairs of high index Variofocals, Nike and Converse frames, eye test and eye scan was very good value. I was going to go for the cheaper frames (Lambretta!!!) but they were too narrow.

Next week we're off to a wedding which is in the middle of nowhere. So no choice really but to stay at the venue. Place looks nice though and we've made it into a longer stay too.

Been quite a busy month overall as have also booked next year's snowboard holiday.

Happy days.

And me - between me and Mr D stoozing approx £48,000 with 1 ending this year and 4 next year. Money is in Trading212 and Zopa ISA's - about 4.35% and the interest is paying a massive chunk to a big long haul holiday this year.  

Stoozing is brilliant

I am surprised stoozing is still a thing. I used to do this to offset against my mortgage, but that all stopped when interest rates plummeted in the financial crash. The last card stooze I did cost me money as I had taken out one with a small fee which ended up being higher than my mortgage rate. We did save around £9,000 overall off the mortgage though.

The drop in interest rates (for both saving and borrowing) and introduction of balance transfer fees put a stop to any stoozing activity for me.

I can see there are now a couple of 0% fee balance transfer cards but most are still with a 3% fee. Slow stoozing is an option but with no income now (living off savings) my chances of getting approved for another credit card would be slim.

kempiejon

@Shimrod
Stoozing is alive and well, perhaps at first glance margins are slim but I have just used Barclaycard 23 months 0% for 2.9% fee. Locked up for a year at 4.2% with Mycommunity bank. You are right that there are higher fees than 10-15 years ago though a few 0% fee options come up currently Santander and there are longer terms like Natwest 32 months 3.49% fees. If you've stoozed before you'll know it's fairly easy money provided you're organised. Still if you're not working, no income you're probably not the customer the CCs want so if you doubt you'll not get a card no point blackening your credit worthiness with applications.

Organgrinder

kempiejon said:

@Shimrod
Stoozing is alive and well, perhaps at first glance margins are slim but I have just used Barclaycard 23 months 0% for 2.9% fee. Locked up for a year at 4.2% with Mycommunity bank. You are right that there are higher fees than 10-15 years ago though a few 0% fee options come up currently Santander and there are longer terms like Natwest 32 months 3.49% fees. If you've stoozed before you'll know it's fairly easy money provided you're organised. Still if you're not working, no income you're probably not the customer the CCs want so if you doubt you'll not get a card no point blackening your credit worthiness with applications.

It most certainly is alive and well and although the long term no fee balance transfer appears dead there are many 3% transfer at about 2.5 years during which time a 4.1% ISA fix is available. On £10,000 this is a £300 fee for net return of around  £700. Not great returns but better in my pocket than someone else's!

Shimrod

Organgrinder said:

kempiejon said:

@Shimrod
Stoozing is alive and well, perhaps at first glance margins are slim but I have just used Barclaycard 23 months 0% for 2.9% fee. Locked up for a year at 4.2% with Mycommunity bank. You are right that there are higher fees than 10-15 years ago though a few 0% fee options come up currently Santander and there are longer terms like Natwest 32 months 3.49% fees. If you've stoozed before you'll know it's fairly easy money provided you're organised. Still if you're not working, no income you're probably not the customer the CCs want so if you doubt you'll not get a card no point blackening your credit worthiness with applications.

It most certainly is alive and well and although the long term no fee balance transfer appears dead there are many 3% transfer at about 2.5 years during which time a 4.1% ISA fix is available. On £10,000 this is a £300 fee for net return of around  £700. Not great returns but better in my pocket than someone else's!

It certainly makes sense to go for a fixed rate savings account given the expectation interest rates will drop again this year.

I think the savings to be had for me would be marginal. Assuming I could get an additional card, I'd expect a relatively low credit limit which would limit any gains.

Organgrinder

Agreed. My offers have dried up recently. Probably due to my overall borrowing. But I have offers on my existing cards that I can use which will still net me enough to make it worthwhile.

I've also just closed/transferred my wealthify accounts. The performance was dire, however the bonuses made it worthwhile. Including the bonuses I got 6.5% growth pa, otherwise half this. My other ISAs have fared better.

I'm now debating what to do come retirement. Do I draw down my pension and put in ISAs (if still an option) or do I leave in my pension. Decisions decisions.

Smudgeismydog

Organgrinder said:

Agreed. My offers have dried up recently. Probably due to my overall borrowing. But I have offers on my existing cards that I can use which will still net me enough to make it worthwhile.

I've also just closed/transferred my wealthify accounts. The performance was dire, however the bonuses made it worthwhile. Including the bonuses I got 6.5% growth pa, otherwise half this. My other ISAs have fared better.

I'm now debating what to do come retirement. Do I draw down my pension and put in ISAs (if still an option) or do I leave in my pension. Decisions decisions.

Will you be retiring pre State Pension? If so, will you have any taxable income when you retire? If not, then withdrawing sufficient taxable income from your pension to utilise your personal allowance might be worth considering.

Organgrinder

Yes retiring at just over 60. Between me and Mrs O we have projected pensions of £30k plus likely pension pots of £150k and ISAs of £45k at 60. We need to fund approximately 6.5 years until SPA when our income will be approx £54k.

Mrs O's pension income allows her to take another £5.5k tax free out of her pension pot annually. We've already decided to take the maximum lump sums too which will add £30k to the cash pot (already taken some). This gives us after tax income of £33.5k per annum. The decision is whether to take what we'd like (an extra £6.5k so approx £40k pa) out of the cash pot, ISAs or the remaining pension pots.

We're likely to use the cash first, then the ISAs which means we don't need to touch the remaining pension pot. Indeed our projections are that our cash and ISAs should still have £25k or so. However I'm thinking it might not be a bad thing to take some of the pension out for a "rainy day". That said it might be best left in the tax free pension wrapper.

Plenty of time to decide. It's 2 years away yet.

LL_USS

Hope you and Mrs O will arrive at a good strategy for TFLS and drawndown, @Organgrinder

I've just looked at my projection: if no career progression and retiring at 65, the DB number will be 27K/year in today's money - I am personally happy about it given the fact that sadly I have been staying at the same top of the current salary grade for 7-8 years whilst most of people from my time have already moved on much higher. I will keep on adding further into the DC pot and save what i can into ISAs/LISAs.

At this time today (more accurately at the end of Mar 2025) my number on pension account is DB = about 13K/year. I know the number suggested is about 14k/year for a minimum standard. Can a person survive okay with just over 1k/month in a relatively cheap city (no rent to be paid)? If so then I wonder if I could retire now and live on savings, wait to take work pension out at 65, and hopefully state pension will still be a thing from 68 ;-).

Just thinking of different scenarios :-). I still like to work. And also it will cost 240-250K in saving to bridge to age 65 even for this bare mimimum living standard.

Organgrinder

LL_USS said:

Hope you and Mrs O will arrive at a good strategy for TFLS and drawndown, @Organgrinder

I've just looked at my projection: if no career progression and retiring at 65, the DB number will be 27K/year in today's money - I am personally happy about it given the fact that sadly I have been staying at the same top of the current salary grade for 7-8 years whilst most of people from my time have already moved on much higher. I will keep on adding further into the DC pot and save what i can into ISAs/LISAs.

At this time today (more accurately at the end of Mar 2025) my number on pension account is DB = about 13K/year. I know the number suggested is about 14k/year for a minimum standard. Can a person survive okay with just over 1k/month in a relatively cheap city (no rent to be paid)? If so then I wonder if I could retire now and live on savings, wait to take work pension out at 65, and hopefully state pension will still be a thing from 68 ;-).

Just thinking of different scenarios :-). I still like to work. And also it will cost 240-250K in saving to bridge to age 65 even for this bare mimimum living standard.

I always used to look at the final figure and worked toward that.

Then I realised I'd be working will 65/66 and might not have time to enjoy my retirement for long. This was mainly cos I had a mortgage to pay off but would have left me with a pension greater than I needed.

So I started looking at the figure I wanted but subtracted the state pension. The figure was £35k. Less state pension became £23k. That gave me a possible retirement date 6 years earlier.

In order to achieve that I needed to clear a mortgage of £60k in 4 years and build up a pot of £70k to cover the years between state pension and my desired retirement age. I also wanted a buffer of £40k or so. I already had over £30k so I had a target to get £140k in 4 years. I took a lump sum and started a phased retirement, taking £14k in pensions, which is put into my pot for early retirement.

Bizarrely had I not done this my lump sum would have got smaller due to commutation factors. I got 24 -28 times the pension I gave up. 

We did the same with Mrs O's figures.

For me the extra 6 years of not working are worth the reduced pension and working part time gives me a much better quality of life.