How much to live on

Nebulous2

https://forums.moneysavingexpert.com/discussion/comment/82127267#Comment_82127267

My budgeting is not to everyone's taste, but it works for me. I have two spreadsheets- a cash spreadsheet and a capital one. They are both updated at the beginning of each month.

My cash sheet has all my credit card accounts and bank accounts including regular savers. My pensions, the interest from my regular savers, cashback from switching banks and other modest deals all go in there. All my expenditure comes off there as well.

I keep the balance positive, but not by much - possibly £1-2000. So I don't really count my regular savers as cash, because they are offset by credit card 0% debt for stoozing.

My capital account has my ISAs, My Sipp and premium bonds. It used to be very volatile, a lot of it was in an international index-fund VWRP, but since moving to low-risk it just gradually trends upwards each month. I don't withdraw any of the income from the capital account as a matter of course. I just leave it to build.

It is:-

40% gilts 50% of those are conventional gilts and 50% are index-linked.

30% money market funds

15% in a bond ETF

15% cash split two / thirds in my ISA and SIPP and one /third in premium bonds.

So that really is a cautious low risk approach.

Transfers between the two spreadsheets are very limited. I pay £240 a month net, £300 gross into my SIPP from my cash account. So that's going from cash to capital - where I expected a steady flow the other way until at least state pension age.

If I need it I will withdraw a chunk from the capital account to top-up the cash account - usually from the premium bonds - though as I said in my last post I've only withdrawn £2000 this year, and have paid £2640 net £3520 gross in the other direction. I was working for the first 3 months of the year, and paying more into my SIPP, so that skews this year's figures a bit, but it still doesn't look as though I'll be drawing down a great deal.

One of my interests, and part of my professional background, is human behaviour. I have a view, which I've tried to share before, that many people, without intending to, limit their horizons in retirement, and consequently spend less than they planned to. There is also the psychological jump of switching from accumulation to decumulation, long-established behaviour is extraordinarily difficult to change.

We are certainly taking and enjoying holidays, local, short-haul and long-haul. We had intended spending much more on our house, but we are comfortable as we are, and have tempered our ambitions quite a bit in that direction. Possibly an experiences over possessions decision.

So an odd setup, but it doesn't keep me awake at night….

Willow1983

Hi Nebulous, great updates from you thanks 😊 both myself and my husband retired/gave up work at the end of 2025. We are doing it on a budget and a lot of people would think we are nuts but it is working for us! We are mainly using up a small pension of my husbands and savings, I have no pension (had a small one from years ago that I cashed in to put towards paying off the mortgage) this was more important to us than having loads of money in pensions. We have no children, no debt and no mortgage so all this helps. Our greatest joy is walking in nature and we both go to the gym this is our priorities to keep as fit and healthy as possible. It takes a lot of mind shift to go from saving to spending but we just think we have no one to leave it to and we have worked hard for every penny so why not spend it getting freedom from jobs we weren’t happy in. We have been a few small breaks so far this year, Oban, Aberfeldy and Durham mostly courtesy of itison as you get some great deals on it and I hate paying full price if I can help it lol. We are going to Greece in a couple of weeks and have booked to go back next year for 3 weeks. We don’t spend on buying “stuff” because we don’t really need anything. I cook from scratch and am really good at budgeting. As I say what we live on isnt for everyone but it works for us and so far so good. If we are both lucky enough to get to SP age we will be well off compared to what we do with our money just now. Just over 3 years for my husband and 4.5 for myself. But the way the world is just now who knows what will happen. Willow

Organgrinder

We don’t spend on buying “stuff” because we don’t really need anything. I cook from scratch and am really good at budgeting. As I say what we live on isnt for everyone but it works for us and so far so good.

This is so true - the forum is full of different people with different views on what works for them. I think I'm very much like @Nebulous2 for example. I track my cash and my capital and I think I do ok overall.

I've just checked on the teachers pensions website and finally my status has changed to "retired" and my calculations are being done so fingers crossed for payment next week!

Willow1983

Fabby Organgrinder AT last! Willow