How much to live on

Dazza1902

[Deleted User] said:

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!

With state pension would your income allow you to increase your savings ?
The savings you have £40 ish would certainly cover unexpected calamities , new car, roof , boiler etc.
 I would have thought you have most eventualities covered.

[Deleted User]

Dazza1902, is your question addressed to myself or Heinzbean?

Speaking for myself, even with fairly generous spending on my part for travel and other pursuits, I could see my savings increasing by £2000 to £3000 per annum. 

blue.peter

scottish_lassy said:

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..........

Well, nothing much has changed for me, since I've been retired for several years now. Here, for what it's worth, is a breakdown of my actual expenditure over the last 12 months. This is for a single person living in a Band D house. I was a little surprised by the end total: I was expecting a higher figure. Obviously, the pandemic has meant that I haven't spent as much as I would in a normal year on things like trips away and so on. I rather expect my energy bill to be higher next year!

Bills:Council tax		-£1,562.81
Bills:Electricity & Gas		-£1,542.51
Bills:Landline + Internet Service		-£284.63
Bills:Mobile phone		-£82.50
Bills:TV Licence		-£157.50
Bills:Water and Sewer		-£656.66
Subtotal			-£4,286.61
Car:Fuel		-£174.34
Car:Maintenance		-£235.10
Car:Parking		£1.93
Car:Road Tax		-£20.00
Subtotal			-£427.51
Clothing		-£299.35
Subtotal			-£299.35
Donations			-£704.98
Food & Drink		-£44.84
Food & Drink:Alcohol		-£554.45
Food & Drink:Eating out/Takeaways		-£214.84
Food & Drink:Groceries		-£1,772.43
Subtotal			-£2,586.56
Gifts		-£324.32
Subtotal			-£324.32
Healthcare		-£88.03
Subtotal			-£88.03
House sale & purchase		-£118.80
Subtotal			-£118.80
Household		-£59.95
Household:Cleaning		-£20.40
Household:Garden		-£388.65
Household:Kitchen		-£16.00
Household:Maintenance		-£138.28
Household:Storage & moving		-£47.52
Subtotal			-£670.80
Insurance:Car		-£257.60
Insurance:House & contents		-£85.20
Subtotal			-£342.80
Interest		£233.40
Subtotal			£233.40
IT:Consumables		-£134.97
IT:Hardware		-£117.52
IT:Software		-£35.03
Subtotal			-£287.52
Leisure:Books and Magazines		-£992.93
Leisure:Concerts		£103.50
Leisure:DVD/BluRay discs		-£40.39
Leisure:Recorded music		-£136.28
Subtotal			-£1,066.10
Miscellaneous		-£223.52
Subtotal			-£223.52
Personal Care		-£120.65
Subtotal			-£120.65
Total			-£11,314.15

scottish_lassy

That is really, really useful blue.peter and I shall go over your figures to see how mine compare.  Do you have savings to pay off a car??  I don't even know if I'll buy another car in the future given how things are changing transport wise.  I am considering just hiring a car occasionally and then I don't have any of the maintenance, insurance etc.  (I already do a car share type arrangement with my daughter and her family which has worked well)

blue.peter

scottish_lassy said:

 Do you have savings to pay off a car??  I don't even know if I'll buy another car in the future given how things are changing transport wise.  I am considering just hiring a car occasionally and then I don't have any of the maintenance, insurance etc.  (I already do a car share type arrangement with my daughter and her family which has worked well)

Yes, I'm fortunate. I have cash savings and an ISA that are sufficient to both buy a new car, if I want one, and to buy a nicer house. Or a house in a nicer area

There's no mortgage or rent in my spending because I paid off the mortgage before I retired. I want to move house, but am finding it easier said than done. There are hardly any houses on the market at the moment. (The £118.80 listed under House Sale & Purchase represents the cost of the EPC that I had done a few months ago in order to sell this house.)

I own the car outright (eight years old, but very low mileage and very reliable). I'm not planning to replace it for a few more years yet. Like you, I'm debating just getting rid of it at some point and relying on public transport and occasional car hire.

Frogletina

Hi blue.peter

Very interesting to read your breakdown figures.

I'm single, retired and in a band D house - my total is £16,500.

Although I don't run a car, I do have other costs in addition to the ones that you show I did have 3 holidays this year and my gift expenses are higher due to my family increasing now to include great-grandchildren. 

My breakdown, in broader categories than yours are as follows:

Household (including groceries); £7891

Personal: £768

Eating out, trips and gifting: £5103

(much higher than usual due to agreeing to cover the vet costs for an injured tortoise for my grandaughter)

Holidays: £2787

Madrick

blue.peter said

Books and Magazines		-£992.93
Leisure:Concerts		£103.50
Leisure:DVD/BluRay discs		-£40.39
Leisure:Recorded music		-£136.28
Subtotal			-£1,066.10

Hi Blue Peter

I love reading other people's outgoings, it really helps to highlight areas that I can look at to maybe reduce my own expenses prior to retirement

I notice the concerts at £103.50 is a positive number. Was this a refund for a cancelled event?

Nearly £1k on books and magazines is quite phenominal... 50 - 100 books a year
Where do you store the books once you have read them or do you pass them to charities? 

One thing that does help, is if people include their approx location. Someone living in a small town in a rural Scottish or Welsh location, will have different expenditure to someone in the South East /London. 

blue.peter

Madrick said:

I notice the concerts at £103.50 is a positive number. Was this a refund for a cancelled event?

Close, very close. It's actually the refunds on two concert tickets. The shows were postponed from last year, but I still decided not to attend because of the pandemic.

Madrick said:

Nearly £1k on books and magazines is quite phenominal... 50 - 100 books a year
Where do you store the books once you have read them or do you pass them to charities?

In fact, it's more like 150 - 200 books a year and very few magazines. Yes, I read a lot. It's my main leisure activity and, being retired, I can give it a fair bit of time. Most represents e-books. That's partly because they're very easy to store. They take up negligible physical space. I buy very few printed books: perhaps half a dozen a year. Also, part of that spending is a Kindle Unlimited subscription, so it represents, in effect, library books that I don't keep.

Madrick said:

One thing that does help, is if people include their approx location. Someone living in a small town in a rural Scottish or Welsh location, will have different expenditure to someone in the South East /London. 

Fair point. I'm in Salisbury.

hugheskevi

Personally I have always found it very helpful to keep annual records of expenditure. This is much easier than recording all individual expenditure, as all you need to do is save a set of financial records each April, calculate a few key expenditure items throughout the year and calculate the position each year.

I've been doing this since 2013/14, logging all significant income - so things like somebody giving me £10 for Christmas or whatever doesn't get recorded, but is also trivial in terms of annual income/expenditure. Then I calculate the main areas of expenditure to show where the money went, and whatever is left is what I spent on general living - shown as 'Other (Consumption)' in the chart below.

It has proved very consistent, with the increase in 2017/18 reflecting myself and wife going on a long holiday to Africa, as well as paying for another trip the following year within 2017/18. That is also why 2018/19 was lower than other years, as all of our holiday costs for 2018/19 had been incurred in 2017/18.

I find this great to calculate the expenditure my wife and I are likely to need in retirement - we are a couple living in London with no children and both with full-time jobs, and our annual expenditure on living costs has typically been about £30,000. Building up a long-term record like this ensures large one-off costs get captured, with replacement car, new boiler, house redecoration and so forth all getting captured within the residual expenditure category.

gambleruk

Here you are folks, my figures for 2021, very surprised how much we have spent on takeaways and gigs though going to blame our 20 year old son for them, have a great New Year everyone.

Electricity £2,254.00

Council tax £1,808.00

Dentist £360.00

Broadband £260.00

Lottery £408.00

Water £522.00

Food & Groceries £3,529.00

 Mobile Mrs £120.00

Dogs Vets Food etc £600.00

Tv Licence £157.00

House Insurance £55.00

Mobile £50.00

Record player service £145.00

Petrol £700.00

Takeaways £860.00

Health/Beauty/Clothes £95.00

Holidays £1,428.00

Nights out £1,081.00

Gigs Tickets £824.00

Household Equipment £471.00

Car Serv, Mot, Tax, Ins £675.00

Total £16,402.00