How much to live on

otb666

Baron_Dale Happy New Year As you know my circumstances Please help On DB PENSION what is the commutation factor db pension Can you check whether 37.5 is correct? option 1 4800pa 15k cash option 2 4400pa 30k indexed linked 5% apart from last 2 years cpi age 55 also what would you do? Solid scheme (i did not get a reply on pensions board) Thank you

[Deleted User]

Happy New Year obt666. I do not feel I have the necessary expert knowledge to answer your question accurately. However it would appear that by giving up £400 per annum pension you gain another £15000 lump sum which I imagine is tax free. That is indeed £37.5 for every £1 given up. That seems good to me. When I claimed my teaching pension the rate there is £12 for every £1 given up.

otb666

Thank you Baron_Dale it does seem good which we will most probably do and will mean we will have 50k savings after paid off mortgage and 1800pm coming in Just could not understand why so high but looking at annuity rates would have to spend 20k to get 400pa So still needs careful consideration -I am terrified of making wrong decision and appreciate support provided here for free

intgomo

First of all, may I wish everyone a very happy and healthy 2022.

I usually lurk on here so I also want to say thanks to those who have posted their outgoings - always good to compare and contrast with one's own spending.

We are a household of 2 with no kids or other dependents. We live in Edinburgh and are still working full time. I'm planning retirement in a few years and OH in about 5 years.

Outgoings for 2021 look like this (loosely based on MSE's budget planner):

Bank Charges   £24.87

Books   £191.81

Car Tax   £155.00

Charity Donations   £260.00

Cinema/Theatre   £39.25

Clothes   £306.78

Cloud Subscriptions   £54.21

Coffees/Sandwiches/Snacks   £393.70

Computing   £949.88

Council Tax & Water   £3310.57

Domestic Fuel   £115.00

Drinking Out   £411.38

Eating Out   £1413.09

Energy Bills   £1337.98

Garden Maintenance   £507.02

Gifts   £931.28

Holidays   £3715.29

Household Maintenance   £119.95

Internet & Phone Line   £302.92

Investment Advice   £468.00

Miscellaneous   £456.49

Mobile Phone   £104.80

Newspapers & Magazines   £4.00

Petrol/Diesel   £234.02

Rail/Bus/Coach/Taxi   £208.53

Sofa/Kitchen/TV   £1197.68

Supermarket & Drinking In   £6281.82

Takeaways   £340.66

Tax   £574.70

Travel Insurance   £43.20

TV Licence   £160.50

TV Subscriptions   £173.90

Annual Total   £24,788.28

NB:

1. Council tax is higher than usual because it includes our main home and a flat that we sold earlier in the year.

2. I'm embarrassed by the 'Drinking Out' figure. Clearly I've been too generous when it comes to my round!

I didn't prepare figures for 2020 but I reckon 2021 has been extravagant by comparison. We managed a few trips away (both foreign and domestic) plus many more days/nights out and in with family and friends.

Our budget sits around the £25k mark and, like others, we keep a separate pot for large one-offs such as roof repairs, new boiler etc. No such requirements in 2021 thankfully.

Daffodil1234

Hello All, like others I find that people posting their spending has been very useful, especially thank you to Blue Peter and Intgomo. 

Here is mine for 2021 - this covers 2 adults, both working.  We are aiming to live on less than £26k per year (as an experiment to see how much we need in retirement).

Categories	Actual Spend per year 2021
Bills - Household bills & all insurance, house maintenance,  but not food	6788.27
Supermarket spending, plus food and drink snacks (coffee, sandwich)	6945.26
Travel, bus, petrol, car bills	1396.47
Personal care (haircut, clothes, shoes, exercise)	1270.98
Phone / Internet / Sky package / TV licence	1272.5
Medical treatment, prescriptions, dentist, optician	1006.84
Discretionary (personal choice) - outings, concerts, 2x hobbies that we do	4318.2
Cat - vet fees, vaccinations, one off charges also	960.51
Holiday	668.89
Gifts	470.16
Charities	475.91
Cash (Miscellaneous)	371.5
Total	25945.49

Notes on the above:

1)  We will split out the "personal care" item for 2022 as this actually includes a gym membership which we joined part way through 21 at £60 pcm for the 2 of us

2) Medical treatment category is high in 2021 as we both needed dental treatment as well as new glasses. Hoping this won't be reoccurring every year.

3) We adopted a kitten in summer 21 and this meant a series of one off charges for vaccinations,adoption fees, and other items.  This should be a lower amount in 22.

4) Holiday amount was lower than normal - mainly due to Covid.  This is also why charity donations are higher than usual.

5) The "personal choice /discretionary" category is clearly where there is the most opportunity for spending and for 22 we have subdivided the underlying categories differently so as to have a clearer idea of where the money is going.

Gin_and_Milk

Although I've got 13 years to go before retiring at 60, I do find these posts both useful and reassuring. As it stands, in today's money I would be retiring with an income of approx £19k and be mortgage free.  I'm hoping to increase this through promotions at work. I did apply for one back in September and was unsuccessful, but I'd like to think I'd get at least one between now 2034!

intgomo

Daffodil1234 said:

2) Medical treatment category is high in 2021 as we both needed dental treatment as well as new glasses. Hoping this won't be reoccurring every year.

Thanks for sharing your 2021 spending Daffodil1234 and I hope you find the medical treatment category pleasantly immaterial by the end of 2022.
Your post got me thinking about spend v budget. We also have a similar pot for optician, dentist etc. and were lucky enough to find it untouched in 2021. Pretty sure it won't be the same in 2022 as I know I'll need a new pair of varifocals.
My intention this year (isn't Jan the month of good intentions? ) is to track spending monthly in arrears to ensure such expenses can be 'stolen' from the pots that were so indulgently exceeded during 2021.

blue.peter

intgomo said:

My intention this year (isn't Jan the month of good intentions? ) is to track spending monthly in arrears to ensure such expenses can be 'stolen' from the pots that were so indulgently exceeded during 2021.

Rather than track in arrears, as you're planning to do, I find it easier to categorise my spending as I go. I record it in AceMoney daily, and associate categories with each entry. It has a split function, so that if I (for example) spend £20 at the supermarket, I can record the £2 spent on shower gel as personal care and the other £18 as groceries.

AceMoney has an excellent reporting function. Whenever I want, I can get it to generate a breakdown of my spending, either over a standard period (e.g., last 30 days), or a user-defined period. The list that I published above is an AceMoney report that I downloaded as a CSV file, opened in a spreadsheet, then edited out some stuff that I didn't think necessary, and copied from my clipboard into the forum.

I assume that other personal finance management software has comparable functionality. I only referred to AceMoney because it's the one with which I'm familiar.

Here's a simple AceMoney report by way of example. It's my spending so far this month (just three days, of course), broken down by category (subcategories could be shown, as above, but aren't in this one). There's no income because I won't receive my first January pension payment until Friday.

intgomo

blue.peter said:

intgomo said:

My intention this year (isn't Jan the month of good intentions? ) is to track spending monthly in arrears to ensure such expenses can be 'stolen' from the pots that were so indulgently exceeded during 2021.

Rather than track in arrears, as you're planning to do, I find it easier to categorise my spending as I go. I record it in AceMoney daily, and associate categories with each entry. It has a split function, so that if I (for example) spend £20 at the supermarket, I can record the £2 spent on shower gel as personal care and the other £18 as groceries.

Thanks for the tip blue.peter - I'll have a look at it. Used Microsoft Money many moons ago but gave up shortly after the sunset version. I now have quite a busy spreadsheet for our personal finances, but perhaps something like this will make life easier.

Bravepants

blue.peter, I note your spend of £992 on books and magazines! That's huge! I gave up buying magazines years ago. However, I have recently discovered an app called "Libby" that can link to your local county library's electronic account.

You can then borrow magazines! My partner and I borrowed the recent Christmas and New Year edition of the Radio Times.

I have also borrowed popular computer magazines, music mags, and technology mags, and dare I say it "Viz". They have 3500+ magazines available. All the latest editions.

I'm also looking at my shelf full of cookbooks and realise that most of our recipes come from the Internet these days!