How much to live on

Heinzbean

You can do it cheaply.

I got sick of work at 53 and just left.

Anyhow I shifted all my savings to good earning interest rates/premium bonds..Santander free money accounts etc.. To create a bit of an income. It was good for about a year then the interest rates started dropping.

Paid mortgage off 22 years ago. Lived rent free for 22 years.

Got rid off a small pension cashed it in at 55 claimed all taxes back….

Friends told me I was wrong to do this .Oh no I wasn't their predicted private pensions are pathetic.

My Outgoings are.

£1680 Council tax -25% = £1260

Phone +5g broadband = £192

VPN= = £24

Gas + Electric = £1057 Super expensive prices just risen. (to be tweaked).was £744

Water Metered = £180

Food mostly Aldi +Lidl =£1820

Approx =£4533 / 12 =£377.75 Month £87.17P er week.

Minus interest / Winnings = £2569.99 /12 =£214 Month £49.52 Per week

The Actual cost to me £37.65 Per week

Savings /premium bonds earned / Interest paid monthly accounts.

Jul =£154.14 Aug -£208.45 Sep £283.45 Oct =£130.18 Nov = £231.34 Dec = £279.95 =Average = £214.16

My savings pot will last £268,000 /£37.65 =7123.87 Weeks 136.99 Years.

(spreadsheet styley). Unless my roof blows of or my boiler falls of the wall.

This is the cheapest I could possibly live house worth > £425,000k but I need it to live in.

2 spare rooms I wont have lodgers.

I have supported myself for the last 7 years.

I have 7 years to go before I can claim the Government Pittance…………

There prediction is completely wrong they have missed my apprenticeship years.

I cannot access the Government Gateway my Passport has expired. I don’t need a passport because you cannot really use it while Covid is around. So catch 22. The pension pot is not going anywhere.

Fix car myself, fix house myself fix computer myself, fix .Service my mountain bike myself,

hobbies all free ,running ,Weight training, off-road mountain biking etc. Got decent Eos 5d for photography etc.

have a classic car costs nothing loses nothing so cheap not worth adding costs.

Also I don't include Cost of Christmas just pittance.

Pub dinners are off for a while too. Also winter sun holidays off too.

I am a fully qualified electrician so it would be easy to go back to work if need be.

Life goes so fast my next post will be my exit strategy, how do I leave this earth with 1p left in my bank account.

Ebenezer Geezer.

DairyQueen

Heinzbean said:

You can do it cheaply.

I got sick of work at 53 and just left.

Anyhow I shifted all my savings to good earning interest rates/premium bonds..Santander free money accounts etc.. To create a bit of an income. It was good for about a year then the interest rates started dropping.

Paid mortgage off 22 years ago. Lived rent free for 22 years.

Got rid off a small pension cashed it in at 55 claimed all taxes back….

Friends told me I was wrong to do this .Oh no I wasn't their predicted private pensions are pathetic.

My Outgoings are.

£1680 Council tax -25% = £1260

Phone +5g broadband = £192

VPN= = £24

Gas + Electric = £1057 Super expensive prices just risen. (to be tweaked).was £744

Water Metered = £180

Food mostly Aldi +Lidl =£1820

Approx =£4533 / 12 =£377.75 Month £87.17P er week.

Minus interest / Winnings = £2569.99 /12 =£214 Month £49.52 Per week

The Actual cost to me £37.65 Per week

Savings /premium bonds earned / Interest paid monthly accounts.

Jul =£154.14 Aug -£208.45 Sep £283.45 Oct =£130.18 Nov = £231.34 Dec = £279.95 =Average = £214.16

My savings pot will last £268,000 /£37.65 =7123.87 Weeks 136.99 Years.

(spreadsheet styley). Unless my roof blows of or my boiler falls of the wall.

This is the cheapest I could possibly live house worth > £425,000k but I need it to live in.

2 spare rooms I wont have lodgers.

I have supported myself for the last 7 years.

I have 7 years to go before I can claim the Government Pittance…………

There prediction is completely wrong they have missed my apprenticeship years.

I cannot access the Government Gateway my Passport has expired. I don’t need a passport because you cannot really use it while Covid is around. So catch 22. The pension pot is not going anywhere.

Fix car myself, fix house myself fix computer myself, fix .Service my mountain bike myself,

hobbies all free ,running ,Weight training, off-road mountain biking etc. Got decent Eos 5d for photography etc.

have a classic car costs nothing loses nothing so cheap not worth adding costs.

Also I don't include Cost of Christmas just pittance.

Pub dinners are off for a while too. Also winter sun holidays off too.

I am a fully qualified electrician so it would be easy to go back to work if need be.

Life goes so fast my next post will be my exit strategy, how do I leave this earth with 1p left in my bank account.

Ebenezer Geezer.

Errr....

You:

- have a car that you self-service but which you never drive, pay road tax or replace parts
- never buy gifts
- don't have your haircut
- never visit a dentist or optician
- never buy anything for a garden
- don't maintain or decorate your house
- never buy clothes or shoes
- never go anywhere for a pint/cuppa/meal
- don't read books
- never replace tech devices/phone
- don't subscribe to anything
- never go on holiday
- don't engage in any social activity/trip/day out unless it is free to travel and participate
- you don't need boiler serviced/chimney swept/septic tank emptied
- don't insure your house/car/bike
- never replace furnishings/linen/kitchen appliances/crockery/pans
- don't need a breakdown service as you never drive the car
- have no pets
- never set foot in a shop/store/garage other than Aldi/Lidl
- don't shop online.

I suspect that if you analysed total spending from bank accounts/cards, rather than just your outlay for utilities and groceries, you may discover that your budget is rather more than the subsistence lifestyle you have described.

SuperSecretSquirrel

Heinzbean said:

Savings /premium bonds earned / Interest paid monthly accounts.

Jul =£154.14 Aug -£208.45 Sep £283.45 Oct =£130.18 Nov = £231.34 Dec = £279.95 =Average = £214.16

My savings pot will last £268,000 /£37.65 =7123.87 Weeks 136.99 Years.

That's almost exactly 1% annual interest... Not bad going these days!

Would you mind specifying which accounts you use? I assume 50k in PBs, but what about the other 218k?

I hold my "extra" cash in an instant access marcus account, paying 0.6%. It seems I may be missing a trick!

scottish_lassy

Well guys, it's almost a year since I started this thread.  I do hope it may have helped others make decisions or move forward with plans.  As for my situation - I was refused an early package so still working.  Luckily, I love my job (although not high pay), 2 minute commute from home with a great team.  Having considered my financial future and realising all I need is enough to cover outgoings, there is now less fear about what the future holds (financially).  There are specific difficulties of running a home on a single income as many costs are the same, no matter how many people live in a house AND costs don't halve if double occupancy changes to single - anyway, that's probably another whole thread! 

I would love to hear if this thread has changed anything for anyone..........

TallGirl

I’ve really enjoyed reading this thread so good to hear from normal people who don’t have massive pensions or huge London houses. I’m 51 and took a part time job this year. It was really scary as I want to retire before I’m 60 but really worked out well and been offered full time now for 5 months. This thread helped me put things into perspective especially with an other half who is 5 years older, has a minimal pension and has just gone self employed from a great salary but toxic work environment. Hope people keep posting on here. 

BooBoo77

Thanks so much for starting this thread scottish_lassy. I’ve been eagerly reading it having recently decided to partial retire next year at age 57. Thinking through how much of an impact on future pension it would be and whether I could live on it as a single parent (as an older mother) and renter, I’ve been scouring the site and these pages in particular. 

RetSol

I would love to hear if this thread has changed anything for anyone.......

I think, @scottish_lassy, that the thread is a safe haven for those who are willing to cut their suit according to their cloth.  

I feel that the "How much to live on" types are those that are seeking to have what to them is "enough" and no more, ie balancing their need for an adequate income with their spiritual/emotional/health needs at this point in their lives. 

Amateurretiree

It has definitely helped me focus on how much money we really need to live on.

we are pretty comfortable, able to pay basics out of my NHS DB pension, will have two State Pensions eventually ( hopefully!) and currently spending down DHs SIPP until the SPs kick in. 

We both retired early, me at 55, DH at 60. Currently 59 and 63, and zero regrets of retiring. 

One of the most useful things I learned was to take into consideration what will be available when one of us is left, I’m sure that would have come to me eventually but am happy we have adequate plans in place.

We are not rich by any means, but good to know we are on the same track as most, we should always have enough to cover our needs.( which are pretty basic!)

[Deleted User]

Many thanks for your post Heinzbean. I have to say though your frugal lifestyle doesn’t appeal to me, but I respect your lifestyle choices. 

I am assuming that your savings are at the moment your total retirement resources until your state pension begins in 7 years time. Have you checked your state pension forecast? Having not paid NI since the age of 53 you may not be entitled to the full ‘new’ amount and it is easy to top up NI payments if necessary. 

At age 67 with your state pension and using your current savings at a rate of 3.5% a year an annual income of of £18000 plus should be sustainable. 

As I said your lifestyle is not for me. I have far less savings than you but have the benefit of an index linked occupational pension and a small annuity plus the state pension coming online in 3 years time. I stopped full time work at the age of 58 and have worked part time since then on several teaching and support work contracts which I enjoy doing. They have given me a good work/ leisure balance as well as financial security.

At the moment, without my part time work and before my state pension begins, I could manage to live a life that includes treats, socialising, good food, travel and other leisure pursuits. I have a flexible budget which ensures all annual bills can be paid as one offs plus money for Christmas, clothes, travel etc……

To be frank the purpose of my semi retired life is to live not merely exist. I have spent quite a bit this year upgrading the kitchen, garden, new roof on the garage and conservatory guttering. However they have made my life more comfortable. 

To be honest I have had a bit of a lightbulb moment concerning money and not in the usual MSE way. I thought to myself come on you are 63 if you don’t do this and that now when are you going too! This is the time I have been working and saving for! I haven’t gone spend crazy but if I want something  I tend to buy it now.I might be lucky and have another 10 or 20 years and there again I might not! I have also set aside a travel budget for when things improve. I have had enough of staying local these past 2 years!

To put this in financial terms, at the moment my pension income is about £19500 a year before tax. I have been earning on average another £7000 a year from part time work before tax and other deductions. This has varied between contracts. (sometimes more sometimes less) I may stop this summer and only do some exam invigilation which which give me maybe another £1000 a year after tax. I certainly intend to do no paid work from the age of 66 when my state pension kicks in. At current value that is looking like £9000 plus a year (If I pay another 3years NI, which I will). So at the moment my post 66 income is looking like something between £29000 and £30000 per year before tax and about £26000 after tax. This will be fine. However, I do not have a huge amount saved or invested but enough for emergencies. My plan is to have £35000 to £39000 in savings and investments at current prices,which is where I am at now.

As for the care cost concern, should it be necessary. Even before the current planned changes were announced I think I will be ok. With my pension income and sale of my house (should it be necessary) I should be ok for 10 to 15 years. Probably beyond hope by then lol! I have no direct dependents, and even if I did, they would be told the same as my extended family,  anything I leave is a bonus for them and not to be assumed!

I apologise that this post has become too long but I like reading the detailed plans of others so only fair I give some myself from time to time! I also wanted this post to reflect my change in thinking towards money in retirement and how I use it. Hopefully too it contributes a little more to the ‘How much is enough ‘ discussion. It is certainly less than most contributors on the Pensions thread believe it to be!

Happy New Year to you all!

SuperSecretSquirrel

DairyQueen said:

I suspect that if you analysed total spending from bank accounts/cards, rather than just your outlay for utilities and groceries, you may discover that your budget is rather more than the subsistence lifestyle you have described.

There certainly seem to be gaps in the budget, a full SoA or careful review of bank statements should help arrive at a true figure (unknowns like roof blown off, car clapping out, boiler dying, etc, notwithstanding).

However, if he doubled his outgoings figure, and reduced the interest/wins to zero, he'd still be set for 30 years just running down savings. A pretty good position to be in.

Slightly strange to refer to the state pension as government pittance though... If qualified for the full SP of £179.60pw, that alone would be sufficient to cover the double outgoings and zero incomings scenario.

PS - I looked up the MSE savings guide, and 1% interest is very much achievable (and beatable). You can earn up to 2.1% on a 5 year fix now. No good for me as I only have a small amount of instant access cash (over and above PBs), and that needs to remain easy access. If I had a few tens of thousands that had to remain as cash I'd probably stagger some in notice and 1/2/3/5 year fixes. I think that's too much in cash for me though, would rather invest.