How much to live on

Gin_and_Milk

This is definitely my favourite pension thread - partly because my retirement figure of £19k is a realistic amount to live on.  I've got 13 years before I can go (earlier would be nice), it gives me chance to increase that amount, but as I should be mortgage free by then, it's not the end of the world if I can't.

Dragon_Lily

I'm glad this thread is still going.    People's figures seem more realistic for the majority of people than the main pensions thread.  I'm looking to retire early either in December this year or March next year at 58.  My husband is retiring in November this year and gets his state pension next year.   We don't have fantastic pensions, just a mix of DB and private pensions.   I have an old DB pension which will be payable at 60 (about £400 per month with a £11K lump sum) and I have a DC private pension - £150K.  My husband has a DB pension payable at 65 at £10K pa and a DC pension of £200K.  We were also lucky to get a very generous heritance which has enabled the early retirement.   We're both quite frugal and have our hobbies, cycling, crafts etc.   

I have enjoyed my job but after the stresses of the last year I'm more than ready to stop work.  I'm also 8 years younger than my husband and we want to have quality time together while we're still relatively young.   I'm still deciding whether to go in December or March.  I suppose the winter would be a good time to finish then I have Spring to look forward to.  Is there ever a 'good' time to go? 

Farway

Baron_Dale said:

At the moment I am considering what to do from next September. My temporary contract came to an end in July although heavy hints have been dropped they want me back in some capacity. I enjoyed my couple of days a week and the money was a useful top up. I will have a think and see what is offered.

Garden is looking good now that the new fencing has been put up, the gate installed and the dead hedge removed. I am now creating in the empty space a new perennial flowerbed, which I want to be particularly insect, bee and butterfly friendly.

Conservatory gutter repair is scheduled for the middle of August.
Plans for the kitchen upgrade have been changed somewhat as the installation cost offered by a well known DIY chain was too high! I am now using an independent builder/installer which should save several thousand!

Maybe with all these expenses I need to seriously consider another temporary contract! 

Take care everyone.

That was always part of my overtime problem, I could earn enough doing overtime to pay a professional to do so called DIY jobs, thus why crawl under a car to replace exhaust pipes / change oil etc when experts can do it in half the time while I sat in warm office?

Dragon_Lily said:

I'm glad this thread is still going.    People's figures seem more realistic for the majority of people than the main pensions thread.  I'm looking to retire early either in December this year or March next year at 58.  My husband is retiring in November this year and gets his state pension next year.   We don't have fantastic pensions, just a mix of DB and private pensions.   I have an old DB pension which will be payable at 60 (about £400 per month with a £11K lump sum) and I have a DC private pension - £150K.  My husband has a DB pension payable at 65 at £10K pa and a DC pension of £200K.  We were also lucky to get a very generous heritance which has enabled the early retirement.   We're both quite frugal and have our hobbies, cycling, crafts etc.   

I have enjoyed my job but after the stresses of the last year I'm more than ready to stop work.  I'm also 8 years younger than my husband and we want to have quality time together while we're still relatively young.   I'm still deciding whether to go in December or March.  I suppose the winter would be a good time to finish then I have Spring to look forward to.  Is there ever a 'good' time to go? 

Winter is good, nothing better than hearing the rain bashing down and going back to sleep knowing you don't have to face it

Dragon_Lily

Farway said:

Baron_Dale said:

At the moment I am considering what to do from next September. My temporary contract came to an end in July although heavy hints have been dropped they want me back in some capacity. I enjoyed my couple of days a week and the money was a useful top up. I will have a think and see what is offered.

Garden is looking good now that the new fencing has been put up, the gate installed and the dead hedge removed. I am now creating in the empty space a new perennial flowerbed, which I want to be particularly insect, bee and butterfly friendly.

Conservatory gutter repair is scheduled for the middle of August.
Plans for the kitchen upgrade have been changed somewhat as the installation cost offered by a well known DIY chain was too high! I am now using an independent builder/installer which should save several thousand!

Maybe with all these expenses I need to seriously consider another temporary contract! 

Take care everyone.

That was always part of my overtime problem, I could earn enough doing overtime to pay a professional to do so called DIY jobs, thus why crawl under a car to replace exhaust pipes / change oil etc when experts can do it in half the time while I sat in warm office?

Dragon_Lily said:

I'm glad this thread is still going.    People's figures seem more realistic for the majority of people than the main pensions thread.  I'm looking to retire early either in December this year or March next year at 58.  My husband is retiring in November this year and gets his state pension next year.   We don't have fantastic pensions, just a mix of DB and private pensions.   I have an old DB pension which will be payable at 60 (about £400 per month with a £11K lump sum) and I have a DC private pension - £150K.  My husband has a DB pension payable at 65 at £10K pa and a DC pension of £200K.  We were also lucky to get a very generous heritance which has enabled the early retirement.   We're both quite frugal and have our hobbies, cycling, crafts etc.   

I have enjoyed my job but after the stresses of the last year I'm more than ready to stop work.  I'm also 8 years younger than my husband and we want to have quality time together while we're still relatively young.   I'm still deciding whether to go in December or March.  I suppose the winter would be a good time to finish then I have Spring to look forward to.  Is there ever a 'good' time to go? 

Winter is good, nothing better than hearing the rain bashing down and going back to sleep knowing you don't have to face it

Yes, winter is edging out March for retiring for those reasons   It's been a lovely summer, enjoying the garden and it would be lovely to do at the start of next year.  There's always plenty to do garden wise.

[Deleted User]

Farway. In my case its more a case of being useless and not interested in DIY. The gardening I really enjoy!

[Deleted User]

I have to add I can cope fine financially without the temporary contract. Yes the top up is useful but its the actual couple of days work I enjoy.

drummersdale

I’m glad this thread has been resurrected as it’s great to hear other people’s stories - I still am hoping to take partial retirement next year when I’ll be 59 - perhaps around May or June. I will have completed around 40 & a half years in the Civil Service by then and my latest calculations on the CS pensions modeller suggest I would get around £25,000 per annum with a lump sum of £75,000 or I could surrender some of the pension for a larger lump sum although I know some people suggest it’s a poor choice. I would lose between 3-5% for taking it before 60 as well.  I was hoping that partial retirement for 3 days plus my pension would be not excessively different to what I take home now and if I use some of the lump sum to pay the mortgage etc then I could then “save” that money to build up a little nest egg before my wife is ready to retire a few years later when she would also get a lump sum as she is also a Civil Servant and will have completed approaching 40 years herself. Some nice holidays out of season would be nice as well as a bit of TLC on the house.

blue.peter

drummersdale said:

... would get around £25,000 per annum with a lump sum of £75,000 or I could surrender some of the pension for a larger lump sum although I know some people suggest it’s a poor choice.

In most cases, it is.

This is because the commutation factor (the number by which an amount of DB pension is multiplied to give a cash sum) is rarely as favourable as the relevant annuity rate.

To take an example, the annuity rate for a pension with LPI is roughly 40:1. Well, it was last time I looked (see upthread), and I doubt that it's changed a lot since then.

So the cost of a £1,000/year more-or-less index-linked pension is about £40,000.

You might, then, expect that giving up £1,000/year of pension would give you a lump sum of about £40,000. That'd be fair.

In the real world, however, I think you'll find that DB schemes are more likely to use a commutation factor of around 25:1, meaning that your £1,000/year of indexed pension will actually only give you something like £25,000. It's therefore very much in the interest of the scheme and the employer - and not the members - for members to take cash instead of pension.

The factor I've used is only a guess, based on my knowledge acquired whilst I worked in the field. It may well be that something a bit nearer to the appropriate annuity rate is being used now. But I'd bet that it's still well short of the annuity rate.

Unless you really, really need the cash, it's unlikely to be beneficial to surrender DB pension to get it.

DC pensions work differently. Because the starting point there is the amount of the pension fund and this is converted to annuity to provide pension income, there's no surrender of pension required to provide a lump sum. It's cost-neutral.

drummersdale

Erm the CS commutation rate is an eye watering 12:1😫

blue.peter

drummersdale said:

Erm the CS commutation rate is an eye watering 12:1😫

Argh! That really is dire! Even I am surprised that it's that bad. It can't have been updated in decades. From memory, that's the sort of commutation factor that I used to see in scheme rules in the early 1980s, when I first started working in that field. Annuity rates have worsened a lot since then, as interest rates have fallen.