How much to live on

Organgrinder

Nebulous2 said:

Organgrinder said:

Clowance said:

Thanks for all replies, we are not transferring the DB pension but he seemed to think it may be better to combine several smaller DC pensions, which I am not convinced about anyway. He did say we could pay the income from the DB pension (not the tax free lump sum) back into another pension to avoid 40% tax which may or may not be useful. Incidentally when I have been trying to work out if  the tax free lump sum was really completely tax free, I found it almost impossible as everywhere I looked said only 25% tax free, it wasn't until I realised the rules were different for DB pensions to the more common DC ones that it became clear. 

I am currently doing just that.

I currently have three pensions in addition to my part time working. At the moment I am liable for approx £4k at the 40% tax rate so I make sure I put an amount into my DC pension to ensure I pay no tax at 40%.

This means that upon retirement I will have grown my DC pension pot to over £80k and have approx £60k in ISAs. (This is somewhat more than I had planned for originally from memory). I'll also have a DB pension of about £23k leading to a pension of £35k once the state pension kicks in.

This has meant a potential full retirement on the above figures at just over 60. I'm a teacher and our contribution rates are in my opinion sufficiently low that I have been able to put money in to my DC pot and my ISAs through a combination of stoozing (currenly £35k), offsetting the mortgage and using pension income.

As already mentioned, everyone's circumstances are different. As someone with children, using my DB pensions in a way that reduced the pension but grew the available assets made perfect sense. No point in me having a potential £43k pa pension at SPA and no savings to leave, compared with a forecast £120k in assets but a £35k pension. Yes I'd have £6.4k pa more each year after tax - but it would take me far too long to have anything to pass on to my children.

I retired at 59. By a quirk of transferring my pension from one public sector scheme to another, I didn't have an automatic lump sum at all. Moving from a more expensive area to a cheaper one provided a lump sum, intended to fund me through to state pension age. Staying on at work until 67 would have meant I was earning more in DB pension and state pension than I had ever earned in my life. I chose not to take a lump sum, and the public sector pension has had a couple of decent CPI increases since I retired. So I've no regrets about that decision. 

I quickly decided I wasn't ready for retirement and took a part-time job. I also discovered that I was reluctant to spend my capital, despite that being what it was earmarked for. I've been paying a fair bit of my earnings into a DC pension. 

Looking at stopping completely early next year, likely to have over £40k in a DC pension, and most of my lump sum intact. I will also have added another £1500 or so in DB pension. 

Once we reach State Pension Age I think it is likely that we will not spend all our income. 

So I'll have a similar outcome to you - by a different route. There's more than one way to skin a cat, as the saying goes! 

Couldn't agree more.

Obviously I've made mistakes along the way. Sometimes I look back and think "if I hadn't done that", but overall I think I've done ok.

I've never lived to work and have always enjoyed my free time. 

I don't drive a flash car. I don't wear expensive clothes nor have expensive watches. I buy what I need as long as it does the job well. That said, I holiday abroad 3 times a year, eat out, enjoy the cinema, cycle, cook etc. And if I can stretch my money further by bank switching, stoozing, cashback etc I will do.

I can't understand people who say they can't afford things yet refuse to even try to find the means to do so.

I don't begrudge others what they have achieved either. Each unto their own.

[Deleted User]

@Organgrinder, some people, even when really trying, may not have the means to be able to afford some things.

I have great empathy for those who plod along trying their best in ways that are comfortable to them.

Not everyone feels comfortable stoozing as you call it or switching bank accounts to make a few pounds either. As you say each to his/her own. 
 
I loved teaching even and genuinely saw it as a vocation. It was my life for many years. Yes I gave up many weekends and worked long hours, but it was always what I wanted to do. After a couple of years full retirement I still miss it greatly. The people and the social interaction. More so at the moment when I am relatively more cut off from others.

Retirement has not been that marvellous so far. Financially it has been fine. However, an older relative has had a very difficult year with two major surgeries since September 2024 and is struggling hard to regain mobility and independence.There is also the mental trauma associated with having been  in hospital for long periods of time plus a few days on life support. For me this has meant being available more or less 24 hours a day as the person lives with me. Other family members do help, but it is a hard slog.

We do not have carers as my relative is quite a private person and to be honest I found them more of a hindrance than a help.I prefer to work to my own timings.

It also means at the moment I have very limited time to communicate or see friends. That is every few weeks or so for the time being.Making future plans is also not really possible at the moment.

As the person is improving I am hoping to resume swimming again a couple of times a week, which means leaving the house a for an hour or so. The person is capable of moving on their own and doing the basics, but I am always worried they may fall again. In this respect it is more my issue than theirs.The person is also as smart as ever which is even more frustrating for them too.

Hopefully, giving the context of my current situation may help some to appreciate that sometimes reading posts about how well people are doing, how much they are making on the side and the great holidays they have had or have planned can be difficult and unsettling.

Finally. I must make it clear that having my relative home, alive and improving, albeit slowly, is still worth all the sacrifices of personal freedom and hard work. In a few months time things will hopefully return to some sort of normality.

helensbiggestfan

Sorry to hear you are finding life difficult at the moment. 

 Being a carer is not just a physical task. It is all encompassing and it consumes every waking moment.  It takes an enormous toll on our emotional and mental  health, as well as wrecking our bodies.  Everything gets put "on hold". Isolation and loneliness are very real. 

I think maybe it's time you looked at getting some extra help and support.  

Whilst you are not an old man by any means you are no longer at your peak.  At 60 plus we do not have the same stamina, strength and resilience as someone in their 30s or 40s.  If you are not careful you will burn out and damage your own health.  

Ask me how I know..........I made exactly that same mistake.  

My GP kept warning me, but of course I knew best.  Lol.  I thought I could do it all, and I did, until I couldn't.  I cared for my husband because I loved him.  Simple as that.  I did it for 9 long years. Would I do it again,  in a heartbeat, BUT I would do things differently.  I would make sure I didn't neglect my own needs in the process like I did before. 

Please don't subsume your own life and destroy your future for your relative. They wouldn't want that for you.  

[Deleted User]

@helensbiggestfan. Many thanks for your comments,  but physically and mentally I am very resilient. As I said the prognosis is good and mobility will be fine in a few months. It was long term we would be exploring other avenues.

The operation she has was so rare it was filmed and watched by students, as well as being written up in medical journeys! Therefore we are getting very good follow up! Fame for her at last.

She now has a metal femur as well as a new hip. The knee was replaced a few years back. She is bionic lol. The leg will be stronger than ever. The consultant said she can jump up and down without danger (but not yet lol)

The family are good. My sister visits at least 3 times a week( and has stayed over at times)  and my nephews have been excellent too.

Thanks again for your response.

Organgrinder

I lost both my parents before my mid thirties. The latter was in a coma for three months involving 300 mile round trips every weekend.

It is indeed draining. Doubtless more so when older.

I come from a very modest background. My parents had very little. I am fortunate to have been able to do fairly well despite what many would say as not doing well for someone who has been to both Oxford and Warwick. That said I'm hardly very successful in life but do know what it means to not have much.

What I would say is do not compare what others are doing now to your own situation. This is after all a forum for financial advice. If you find it difficult, I would stay away until such time as things have settled down.

In any event, you have to do what is right for you.

uralmaid

I came from a modest background too - my parents never had much money and had to save hard for everything they gave me. The same can be said for most of my relatives but they all seemed to be far better off once retired.  I was lucky enough to have received some inheritances in the past few years which has made life very comfortable for us, but I would- if given the choice - have my relatives back with me and no money. I was always taught that if you want something, then you save for it but these days the culture seems to be "if you want it, buy it by any means and don't worry about paying it back"  I have cared for my Grandmother, my Mum and Dad and my In-Laws to the end and it is very hard. Everyone deals with it in different ways - but I don't see why someone elses good fortune or good planning should be unsettling.  Maybe it would be better to step away from MSE Ordinary_yet_unique  and return  when  things have settled down and you can get back to doing the things you enjoy.

Organgrinder

uralmaid said:

I came from a modest background too - my parents never had much money and had to save hard for everything they gave me. The same can be said for most of my relatives but they all seemed to be far better off once retired.  I was lucky enough to have received some inheritances in the past few years which has made life very comfortable for us, but I would- if given the choice - have my relatives back with me and no money. I was always taught that if you want something, then you save for it but these days the culture seems to be "if you want it, buy it by any means and don't worry about paying it back"  I have cared for my Grandmother, my Mum and Dad and my In-Laws to the end and it is very hard. Everyone deals with it in different ways - but I don't see why someone elses good fortune or good planning should be unsettling.  Maybe it would be better to step away from MSE Ordinary_yet_unique  and return  when  things have settled down and you can get back to doing the things you enjoy.

Good to see you back. Hope all is well.

I agree our society seems to offer all manner of means of buying whatever you want with little thought for the consequences.

I've rarely borrowed money except for big purchases (all my life). My first car. My second car. Six houses. My third car. I think that's about it.

I don't consider stoozing borrowing. I only do it cos it's free money. 

Ultimately if a financial institution said to you, here, open a few credit cards and pay us each month what you have spent and three years later we'll give you five or six thousand pounds I would think many would think "what sort of scam is this?". But that in reality is all stoozing is.

I get that some people don't like the impact on credit scores. I get that some worry about the level of debt etc. I was reluctant at first.

But if you have the opportunity to do so and it has no impact other than a few minutes a month to monitor I would recommend it as an easy way of adding to your income.

Albermarle

uralmaid said:

I came from a modest background too - my parents never had much money and had to save hard for everything they gave me. The same can be said for most of my relatives but they all seemed to be far better off once retired.  I was lucky enough to have received some inheritances in the past few years which has made life very comfortable for us, but I would- if given the choice - have my relatives back with me and no money. I was always taught that if you want something, then you save for it but these days the culture seems to be "if you want it, buy it by any means and don't worry about paying it back"  I have cared for my Grandmother, my Mum and Dad and my In-Laws to the end and it is very hard. Everyone deals with it in different ways - but I don't see why someone elses good fortune or good planning should be unsettling.  Maybe it would be better to step away from MSE Ordinary_yet_unique  and return  when  things have settled down and you can get back to doing the things you enjoy.

Assuming that most of us posters on here are of a certain age range, I think it should be remembered that the 1950's and 1960's, and maybe the 1970's, was a time of great social mobility. Working class people going to Uni, more and more ordinary people owning houses and cars. Pensions more widely available with some jobs etc
So there are lots and lots of people today comfortably retired/ part of the prosperous middles classes/ the mass affluent who come from modest backgrounds ( me included - I showed my own teenage kids once were I used to live and they were not very complimentary !) 
Social mobility in the UK before WW2 was almost non existent, and has almost ground to a halt again in the last 25 years or so ( not completely but less than before) so from that point of view at least we were brought up in a golden age. I suppose it is part of being the Boomer generation, although that is more of a US based expression.

[Deleted User]

However there are still millions of people of a certain age who are not affluent or comfortably retired.

Many people did not have easy access to pensions unless they were working in the public sector or the more  middle class professions. Auto enrolment was not available until comparatively recently when employers were finally forced to contribute to their employees pensions. Even today many of those employers try to contribute as little as possible.

Lots of older women have poor pension income because they did not have the necessary NI contributions and lower pensions than men as the result of unequal pay. 

Unfortunately since the early 1990s social mobility has gone backwards. Today many highly paid jobs and professions are once again dominated by the 5% of the privately educated. Higher education has become expensive for many. The waste of talent through lack of opportunity is horrendous.

It is shameful that for many young people today getting on the housing ladder ,for example, is extremely difficult unless they are given a step up through inheritances from wealthier 'Boomers'.

[Deleted User]

@uralmaid I think your statement about the culture today regarding buying things is unfair and inaccurate. Most people who use credit do pay it back. As has always been the case it is a minority of people who do not.

Just to add when people say modest backgrounds are they saying they lived in rented accommodation  or perhaps owner occupied with or without mortgages. To me modest is non owned.

I certainly had modest beginnings. My parents married as teenagers and we lived in very poor accommodation for years until things improved income wise. In those days there was very little protection from unscrupulous landlords. I remember on one occasion my parents spent time and money decorating and improving our flat with the permission of the landlord. They were then told to leave when it was finished. She had her intended outcome of improved accommodation at no expense to herself. There was no recourse in those days.