How much to live on

Farway

blue.peter said:

missile said:

This company, like so many others, was taken over and the culture changed to employees being subject to work study and those who took too long to complete a task were regarded as an expensive liabilty.

Not just the "underperformers". The term "Human Resources" for what often used to be called the Personnel department is dehumanising, albeit accurate. I've always hated it, because it recognises the senior management attitude that all staff are just a resource to be used and then thrown away. It's another indicator that a company doesn't consider its staff as people.

At one time some companies adopted, or looked very favourably on, Jack Welch's GE policy of sacking bottom 10% of annual performance review employees.

The company I was with at the time never went quite that far but I know it was looked upon a good management practice,

This of course led to the back stabbing and brown nosing in order to get a higher review score, in the end they swallowed a lot of Japanese improvement methods, but only the buzz words and not the underlying philosophy

blue.peter

Farway said:

At one time some companies adopted, or looked very favourably on, Jack Welch's GE policy of sacking bottom 10% of annual performance review employees.

Good grief! I never heard about that particular practice.

This is another thing that creates an unpleasant workplace culture. Everyone's in competition with their colleagues in an environment like that. I can easily see how that leads to the back-stabbing that most of us have seen in their working lives. Collaboration and cooperation become dirty words. I really can't see how that benefits a business. People working together must surely be better for everyone - staff and the company - than working against one another.

DairyQueen said:

Having worked my way through several employers during my career my anecdotal experience has been that the bigger the company, the worse the culture. Small companies invite and give flexibility, value teamwork and foster good relationships. Large companies? Cog-in-wheel, full of over-paid 'politicians' and/or unionised jobsworths.

This comment really struck a chord with me. I've long suspected that this was the case, but never worked in an organisation with fewer than about 2,000 staff. I therefore never experienced the culture of a small company.

[Deleted User]

Morning. As interesting as comments about working practices and office politics can be we must be careful the main purpose of this thread doesn't drift away. How are we all coping with what we have to live on?

[Deleted User]

As it has been a while since I have posted anything specific I though I would update some of my financial details/plans for newcomers and oldies alike! I have also posted some of this in the How Much Have I Saved? section of the forum.

I should say I am semi-retired on a guaranteed index linked pension income of just over £19000 a year. I do not collect my state pension for another 3 years. I also work up to 2 days a week on a zero hours contract earning about £450 a month after tax, but not during school holidays. (This money is going towards some home  improvements.) I will also be making voluntary NI payments to ensure I receive as near to the maximum new state pension as possible.

At the moment I save the following amounts regularly.  £100 to a regular saver, £100 to a low risk S&S ISA and £300 a month to a loyalty saver. The last amount is to cover the annual bills, general house maintenance and the voluntary NI payments. I also send £150 a month to another current account. This money over the year covers Christmas, Clothing, Dentist and Birthdays.

At the moment I keep my savings and investments in the following;
Cash ISA
Regular Saver
S&S ISA
Loyalty Saver
Premium Bonds
I also have two current accounts.

I have planned an outline budget for the next 3 years until I get my state pension. After 2024 I shall not be undertaking any more paid work at all. The current work I am doing is enabling me carry out some home improvements. I am also dipping into savings to complete this work. I am useless at DIY and have little interest in it.

So far this year the garden fencing has been repaired and replaced where necessary and a new drive gate added. I have had an old hedge removed a new gravelled seating area laid and all the shrubs trimmed. Two more projects before the year end are a kitchen upgrade and the conservatory guttering to be replaced. All work has been costed. The garage roof will also be repaired if the person doing the job ever gets around to it! Total cost of all this work is about £21000! Eek!

The plan is over the next three years is not to go below £39000 in savings and investments. This is after all the planned work and hopefully some travel!

When I receive my state pension 2024(which in today's money is £9330 pa) I shall be able spend and save some more!  All being well!
I can manage on my current pension income quite well, but as I said above the extra from my part-time work is helping with the improvements. To be honest I enjoy the work and it has been a lifeline during lockdown!

I live in my own mortgage free house. I run medium sized SUV. My monthly bills are about £650 a month which includes everything. I share some costs with another relative. (But I pay most of them)

Hopefully this also demonstrates that you don't need hundreds of thousands to semi or totally retire happily!!

MovingForwards

I'm now due another payrise following an internal restructure, which will put me on nearly £3k PA more than when this thread started. That will boost my DB a little and I'm still aiming for 5 years service.

In a way I've managed to trim my car costs by buying a 6 year old car, instead of running the nearly 16 years old. I've had the initial outlay as with any car, although if I keep this one going for 10 years, that would balance out with not buying / running 4 old ones into the ground and scrapping them over the same period.
- on paper I'm saving about £500 a year just on insurance, tax and petrol, which is what I was paying in repairs on the old car (was so unlucky with my last one!).

I'm still saving each month, paying into my SIPP and making mortgage overpayments; on schedule to be cleared by 2030 and then I can see where I am with early retirement as I will be 55. 

Madrick

As I approach my proposed early retirement aged 60, I have been monitoring my expenditure....

I have taken those annual things, contents insurance, car tax & insurance, annual service, Mot , local non league football season ticket etc and calculated a monthly figure for each

No mortgage, living in South East, 3 bed mid terrace, me plus two sons, but now eldest has just left home.

March & April & May, it was £1500 ish per month, but now one son has moved in with GF, it has dropped to circa £1200 - £1250 expenditure 
 I do like a beer and so £75 - £100 of this is on decent beer, either delivered or drunk socially  at local breweries

So £1250 seems to be my current expenditure, since oldest left home
We do eat well and could cut back in a few areas.... But don't really want to

Youngest has just qualified as a primary teacher, starting in Sept
Currently paying £50-£100 per month towards his keep, but we've agreed this will increase to £400 per month from end Sept when he is in paid employment.

Currently paying 95% of my £2.5k monthly gross salary into pensions, 45% through   salary sacrifice into work pension and rest into seperate personal pension.
Living on a bit of cash that I have in premium bonds and bank accounts, along with a small DB pension of £2k per annum

So my "NUMBER" currently would be around £1250

I have budgeted on around £1500-1600
So there will be a few hundred  left over each month for adding back to cash pot.

Looking good to retire from Christmas, initially on DC pension in drawdown , DB pension, topped up with savings. 
Then in 7 years, state pension kicks in. Start taking smaller amount of drawdown, DB pension, keeping below tax threshold if poss, topped up with cash. 

The scary thing for me would be to actually hand in my notice at work and then that total change from saving and squirreling away cash for the future, to do the 180 degree turnaround to start spending my relatively small  pot to live on

Car is 10 years old, 45k on the clock no major problems, small family car, do about 5k per year
Would probrably change it for a newer model in a few years time, ( around 2 to 3 years old.) I have a bit of cash ring fenced for this.

It won't be a luxurious retirement, but the numbers seem to stack up for a semi comfortable one, with occasional European holidays .

Farway

Madrick said:

The scary thing for me would be to actually hand in my notice at work and then that total change from saving and squirreling away cash for the future, to do the 180 degree turnaround to start spending my relatively small  pot to live on

You may find, as some on here have, including me, that work circumstances change and giving notice becomes a golden opportunity

However you seem to have planned it well ahead and hopefully it goes to plan, mortgage free is such a relief once that mill stone has gone

blue.peter

Farway said:

... mortgage free is such a relief once that mill stone has gone

100% this.

Once I had my mortgage paid off, it was amazing to see my savings going up at a decent rate. (Mind you, I did find that I had to spend my mortgage money on rent, instead of saving it, for a few months. But that's another story.)

The other telling thing was seeing the envy on the face of a senior manager when he heard that I was mortgage-free: this was a guy about ten years or so younger than me, but on a salary that I'd guess would have been about double mine.

[Deleted User]

Madrick, you have planned very well. Your budget is very sensible with a decent cushion. How much are you intending to drawdown you finance that budget after your DB payment and increase contribution from son?

Madrick

[Deleted User] said:

Madrick, you have planned very well. Your budget is very sensible with a decent cushion. How much are you intending to drawdown you finance that budget after your DB payment and increase contribution from son?

Hi Baron_Dale

I have two DC pensions
One old one around £52k, from previous employer, which I cannot pay into
The second is valued around £150k which I am investing into through salary sacrifice 

I also have  a small DB pension of £2k pa which started in June 

I am also paying into a seperate sipp which currently sits at £9k, which I intend to invest £2,880 pa until aged 75

I am widowed, with 2 sons one at home one living away. Both employed with good careers. 

When I hand in notice, I will then start to drawdown the DC pensions in the following tax year, to take out the max ££ to remain below the £12.5k tax threshold. 

So £9k from pensions (plus the £3k tax free) 
Plus the £2k existing DC pension

(I know this is a big drawdown chunk initially and above the 4 or 5% rule, but this will only be for 5 years.) 

Then make up any shortfall from cash/premium bond/s&s ISA reserves
(circa £100k)

Then when  the state pension kicks in, 
reduce the drawdown accordingly to circa £6k

I have not factored in my sons household contributions, even though they will be £4-5k per annum, as this is an unknown, as he could leave at any time. 

I have factored in a growth of all the pensions of 1% to 1.5% per annum

and a 2% growth to my annual "number" for inflation. 

This will last until I am 80

Then I will start to use the seperate SIPP pension, which I calculate will have risen to £70k

As an aside, both my parents are in their mid to late 80's (85 and 88) live seperately and both own houses valued around £350k.
There are only two dependants, myself & sister, so there may potentially be a small inheritance there at some point.
But, similar to my sons keep, I do not count this in at all, as it is an unknown with future care home needs and costs

As I said, it won't be a luxurious retirement, but intend to enjoy it while I still can.