Actual Spending in Retirement against expectations

michaels

hugheskevi said:

OldScientist said:

You have to ask just who is it 'thought by'?

Pension and Lifetime Savings Association - Retirement Living Standards

https://www.retirementlivingstandards.org.uk/

I spend more on everything than that listed in moderate and yet 5 of us live on that budget - do they give details of where the money is going?  Otherwise I say vested interest made up numbers.

Bravepants

hugheskevi said:

OldScientist said:

You have to ask just who is it 'thought by'?

Pension and Lifetime Savings Association - Retirement Living Standards

https://www.retirementlivingstandards.org.uk/

I use these figures in my spreadsheet and uplift them by an assumed 2% each year (BOE inflation target), and run mine and my partner's projected income alongside. Not sure how realistic they are, but if they are even "approximate expected figures" then I consider it a reasonable guide. There is no way I would change 2 cars every 5 years, or spend close to £1500 on clothing though. I bought a bunch of t-shirts from George (Asda) a few weeks ago and they cost me £2.50 each...they'll last a couple of years hehe!

One of our cars is a 20 year old modern classic and the other is a four year old Mazda, which we intend to keep until it starts falling apart, just like our previous 16 year old Mazda 6.

Sea_Shell

I'm happy with "Covers all your needs with some left over for fun!"

If that were a pick n mix I'd have some from the first column and some from the second, but I'd bet we could still do it for under £20,000 !!

PennyForThem_2

Sea_Shell said:

cfw1994 said:

Sea_Shell said:

We only have Nieces and Nephews, most of which are still children.

Our plan, assuming everything is still looking rosy by the time DH gets his DB and SP in payment (10+ years), is to (at least) use our £6000 joint gift allowance and give them all a modest chunk each year.

There are 5 of them, 2 on one side and 3 on the other.   

So then how do you judge "fair"?   Split each side of the family 50/50 and then divvy up between them (so 2 get £1500 each and the others get £1000 each), or give £1200 to each of them as individuals?

You're gifting this to the nephews & nieces....surely equal amounts to them is the thing you would do, regardless of their parental weightings!

Well, as they each move towards adulthood, if they choose not to maintain a relationship with their Aunt and Uncle, then they'll be getting no gifts at all!!!

But then we could also bribe them into coming and helping mow the lawn!!

My further thoughts on the split was a simple, DH has £3000 allowance to gift as he chooses, and so do I.   We each just gift to our own families.    Sorted.

OMG - sorry, this soooo fits the experience of my sons.  It was sort of a family joke (instigated by her brother, my now dead husband) that Aunty was loaded and if you wanted to figure in her will, best to 'look after her'.  

(My part was I increasingly disliked her - partly for the above.  This may well have been noticed by my adult children.)

One did take notice of her birthdays/Christmas and spasmodically stayed in touch.  Then I think he got sick of being told his presents weren't that imaginative/not liked and he gave up.  The other did take her out for unusual experiences / meals etc.  Neither lived near - in fact 100s of miles away.  The former got a quarter of what the latter was left in her will.

And yes, she was loaded - and yes, she obviously left according to attitude.....

(I wasn't even notified she had died - got zilch - which met expectations!)

pensionpawn

Albermarle said:

hugheskevi said:

OldScientist said:

You have to ask just who is it 'thought by'?

Pension and Lifetime Savings Association - Retirement Living Standards

https://www.retirementlivingstandards.org.uk/

This is taken from research by Loughborough University. The amounts are after tax if I remember correctly
Which have published some similar figures.
Even the Comfortable figure does not include alcoholic drinks , or cleaners, gardening/tree surgeons , general redecoration etc
Although £1500 each for clothes seems excessive.

...and the worrying thing about these claims is that some will be fooled, conned, maybe too strong phrases, into sacrificing too much salary (think FIRE) through their accumulation phase, and extending that accumulation phase, to amass a fortune of a pension pot only to find that they have more money than they can spend in the time available as they are now exhausted and pushing elderly. Some (most?) of these figures above are in excess of current working take home pay! If these are net figures comfortable equates to a couple current earning, for example, around £40k and £24k! I've always equated comfortable to two thirds of final salary.

zagfles

michaels said:

hugheskevi said:

OldScientist said:

You have to ask just who is it 'thought by'?

Pension and Lifetime Savings Association - Retirement Living Standards

https://www.retirementlivingstandards.org.uk/

I spend more on everything than that listed in moderate and yet 5 of us live on that budget - do they give details of where the money is going?  Otherwise I say vested interest made up numbers.

Agreed - it looks rubbish to me, our spending (ex mortgage) has been around £30-35k a year for a family of 4 and that includes far higher spending on food (inc booze) and far more holidays than even the "comfortable" section, similar on the other stuff to "moderate".

The Which one is more credible, £26k for "comfortable" and £41k for "luxury".

https://www.which.co.uk/money/pensions-and-retirement/starting-to-plan-your-retirement/how-much-will-you-need-to-retire-atu0z9k0lw3p 

Albermarle

michaels said:

hugheskevi said:

OldScientist said:

You have to ask just who is it 'thought by'?

Pension and Lifetime Savings Association - Retirement Living Standards

https://www.retirementlivingstandards.org.uk/

I spend more on everything than that listed in moderate and yet 5 of us live on that budget - do they give details of where the money is going?  Otherwise I say vested interest made up numbers.

Agreed - it looks rubbish to me, our spending (ex mortgage) has been around £30-35k a year for a family of 4 and that includes far higher spending on food (inc booze) and far more holidays than even the "comfortable" section, similar on the other stuff to "moderate".

The Which one is more credible, £26k for "comfortable" and £41k for "luxury".

https://www.which.co.uk/money/pensions-and-retirement/starting-to-plan-your-retirement/how-much-will-you-need-to-retire-atu0z9k0lw3p 

Although I guess if you asked some people what they envisaged as a 'luxury' retirement, they would think of an upmarket retirement village and/or driving a large expensive car and/or a nice river cruiser or yacht and/or eating out most nights of the week with expensive bottles of wine and/or regular exotic holidays etc etc
In which case you might need more like £41K each, rather than as a couple.

Luxury is in the eye of the beholder you might say .

Bravepants

pensionpawn said:

...and the worrying thing about these claims is that some will be fooled, conned, maybe too strong phrases, into sacrificing too much salary (think FIRE) through their accumulation phase, and extending that accumulation phase, to amass a fortune of a pension pot only to find that they have more money than they can spend in the time available as they are now exhausted and pushing elderly. Some (most?) of these figures above are in excess of current working take home pay! If these are net figures comfortable equates to a couple current earning, for example, around £40k and £24k! I've always equated comfortable to two thirds of final salary.

Yes, me too. The other third of salary being taken up by the typical cost of a mortgage, which by the time one retires one would hope to have paid off.

Albermarle

Bravepants said:

pensionpawn said:

...and the worrying thing about these claims is that some will be fooled, conned, maybe too strong phrases, into sacrificing too much salary (think FIRE) through their accumulation phase, and extending that accumulation phase, to amass a fortune of a pension pot only to find that they have more money than they can spend in the time available as they are now exhausted and pushing elderly. Some (most?) of these figures above are in excess of current working take home pay! If these are net figures comfortable equates to a couple current earning, for example, around £40k and £24k! I've always equated comfortable to two thirds of final salary.

Yes, me too. The other third of salary being taken up by the typical cost of a mortgage, which by the time one retires one would hope to have paid off.

Probably to get the famous Two Thirds of net income you only need around 50% of pre tax income as most people pay less tax , pension contributions and no NI in retirement.
If you had two thirds of salary I guess you would end up with 75%/80% of net income .
Not sure which is the correct way of looking at it but it is only a guideline anyway.

OldScientist

Albermarle said:

hugheskevi said:

OldScientist said:

You have to ask just who is it 'thought by'?

Pension and Lifetime Savings Association - Retirement Living Standards

https://www.retirementlivingstandards.org.uk/

This is taken from research by Loughborough University. The amounts are after tax if I remember correctly
Which have published some similar figures.
Even the Comfortable figure does not include alcoholic drinks , or cleaners, gardening/tree surgeons , general redecoration etc
Although £1500 each for clothes seems excessive.

Thanks for the link - I'd read through that before (and should have clicked through to the HL link!) - the methodology is sound (at least it is well described and incredibly detailed, including down to individual items of food from Sainsburys and a 25 year depreciation on a garden fork), but the nomenclature is, I think, somewhat unfortunate. Their detailed calculations indicate that a couple would need about £700k between them to purchase an annuity to obtain the income stated when combined with the SP. I note that they used 4.8% with the annuity (you can currently get level at 65 with this rate, but not RPI until 75). Given the mean UK pension pot is about £70k (and that must be a well skewed distribution) most people are going to be a long way off this.

I do note that the comfortable couple get through a bottle each of white and red and 8 bottles of beer per week (no tobacco included though). They also have a gardener and cleaner. There's a set of spreadsheets at https://www.retirementlivingstandards.org.uk/RLS-full-data.zip that make interesting reading.