Standard of living - minimum, moderate or comfortable figures released today (12 January 2023)

SarahB16

I see today they have released updated figures for how much you need (single or a couple) to live on for a minimum, moderate or comfortable standard of living in retirement.  I'm just on a quick lunchbreak so grateful if somebody finds the details they could post them otherwise I'll post the amounts later on.  I read the figures in Josephine Cumbo's (Financial Times) tweet.  

A question I have is when we see the amounts are these assumed to be net or gross?  I could not see it mentioned if this was net or gross income.  

Marcon

SarahB16 said:

I see today they have released updated figures for how much you need (single or a couple) to live on for a minimum, moderate or comfortable standard of living in retirement.  I'm just on a quick lunchbreak so grateful if somebody finds the details they could post them otherwise I'll post the amounts later on.  I read the figures in Josephine Cumbo's (Financial Times) tweet.  

A question I have is when we see the amounts are these assumed to be net or gross?  I could not see it mentioned if this was net or gross income.  

Who is 'they'? There are all sorts of organisations issuing projections the whole time. Any idea which you were reading about? Edit - think you probably have this in mind:https://www.plsa.co.uk/press-centre/news/article/rising-prices-add-almost-20-to-minimum-cost-of-retirement

I never understand how these are supposed to relate to real life. Someone who has only ever earned minimum wage is going to have a vastly different take on what constitutes a 'comfortable' standard of living. Looking at the basis on which such calculations are done, I can't help feeling that doing your own spreadsheet of your own costs is going to give a much better and more accurate take on how much you'll need, taking into account your current levels of expenditure/projected levels once you stop work and no longer have to pay for transport, work clothes, lunches etc.

NoMore

Home - PLSA - Retirement Living Standards

 Its these ones, but I agree with Marcon, they are largely worthless and you should plan your retirement on your own circumstances.

Getting_greyer

Just had a look. PLSA. The figures quoted are net income. There are links on the page to check the methodology. For instance the figures exclude rent or mortgage.

molerat

Most of these things come from parties with a vested interest in the subject, in this case the message is that you need to put more money into your pension to have any sort of a reasonable retirement so I wonder who benefits from this message 

We are the voice of workplace pensions and savings

We represent pension schemes that together provide a retirement income to more than 30 million savers in the UK and invest more than £1.3 trillion in the UK and abroad. Our members also include asset managers, consultants, law firms, fintechs, and others who play an influential role in people’s financial futures.

"Comfortable" is a relative term.  Someone who takes 4 cruises a year is unlikely to be "comfortable" with any less, being stuck on a boat for 2 weeks is my idea of hell let alone 4 times a year !  To me comfortable means being able to do what you want to do, spend what you want and need to and have money left in the bank at the end of the month.  Some of the things "needed" in the tables are laughable, I have previously managed to live way above their minimum standard on on far less than the minimum income figure.

JoeCrystal

Haven't checked the website yet but the whole spreadsheet they make up what they spend in makes me laugh! Especially the comfortable ones with a silly amount of pounds on buying clothes and so on. Just waiting for them to upload the data for 2022 but 
I have sent an email to them to fix the issue with data for 2022 is from 2019.

2019 can give a taste on what a comfortable couple will spend on.

£1,400 per year on Birthday and Christmas and other gifts.
£1,000 per year on family support, such as paying for grandchildren's hobbies.
£650 per year on the female haircut
£120 per year on the male haircut
£1300 per year on gardeners, cleaners and windows cleaners 
£300 per year on the gardening
£1000 per year on female clothing
£500 per year on male clothing

You can see why I think that it is just plain stupid. 

bluenose1

Thanks OP I enjoy reading these to see what others spend their money on, think it is based on research of actual retirement spending by Loughborough University. 

Gives an indication of how others spend in retirement, though of course we will all have different ideas of what we would class as a luxurious retirement etc.

The increases from last year because of inflation are quite daunting!!!!

michaels

bluenose1 said:

Thanks OP I enjoy reading these to see what others spend their money on, think it is based on research of actual retirement spending by Loughborough University. 

Gives an indication of how others spend in retirement, though of course we will all have different ideas of what we would class as a luxurious retirement etc.

The increases from last year because of inflation are quite daunting!!!!

I think it is perceptions of what the three categories should cover rather than any study of what is actually spent and what category the spender puts themselves in - ie our survey said that people think to have a minimum standard of living in retirement you should be able to spend £580 per year on clothes

There is a big increase (20%) for the minimum lifestyle but the small print says this is not all about rising prices but also because the 'minimum basket' has been increased with regards to quantity and quality of food.

Which? added some numbers on what size DC pot you would need to meet the various income levels if you already had a full state pension and appeared to use a gross SWR of 6% - you are going to be pretty disappointed if you planned your retirement on that basis!

Albermarle

JoeCrystal said:

Haven't checked the website yet but the whole spreadsheet they make up what they spend in makes me laugh! Especially the comfortable ones with a silly amount of pounds on buying clothes and so on. Just waiting for them to upload the data for 2022 but 
I have sent an email to them to fix the issue with data for 2022 is from 2019.

2019 can give a taste on what a comfortable couple will spend on.

£1,400 per year on Birthday and Christmas and other gifts.
£1,000 per year on family support, such as paying for grandchildren's hobbies.
£650 per year on the female haircut
£120 per year on the male haircut
£1300 per year on gardeners, cleaners and windows cleaners 
£300 per year on the gardening
£1000 per year on female clothing
£500 per year on male clothing

You can see why I think that it is just plain stupid. 

Maybe outside of our MSE forum bubble, such spending patterns may seem more normal? Many people actually enjoy spending money strangely enough !

bostonerimus

Such surveys are useful as very, very broad rules of thumb and as a starting point. But how much you need and what someone considers to be "comfortable" are so personal that they must be used with great care. I don't have a house payment so I spend closer to the lower end of these estimates to have what I consider to be a comfortable retirement. Also where you live will be a big influence. 

If these surveys get people to go over their budget and understand their spending then that's enough of a reason for them to exist.

Sea_Shell

I'm saying nothing!!! 😉🤣😲😜