Escape to the country & living off savings

Skint_yet_Again · 9 January at 8:49AM

Gosh it’s cold this morning 🥶 11 degrees so I am writing this under my duvet 😆 Will put the heating on at 8am then get up when the house has warmed up a bit.

I have had an email from V money to confirm my 1 year bond matures 20 Jan £15k plus interest and I need to decide whether to withdraw some/all or reinvest.

I have £5k in 6% (variable) instant access saver

My 2 year bond matures in feb. £50k plus interest.

My financial year runs April - March

I need £10k to live off April 25 - March 26. I will need £10k for April 26 - March 27. So I am thinking as follows

£10k into instant access for living 2025-26 (£5k from maturing 1 year bond & 5k from 2 year bond when it matures in feb)
£5k to remain in 6% account
£10k into 1 year fixed rate bond jan for 2026-27
£45k into 2 year bond in feb

The mse weekly email is showing known-name V money as best 1 Year 4.51% and Leeds bs for 2 yr 4.05%. (this may change by time 2 year bond matures).

I am totally risk averse. Anyone have any thoughts?

[Deleted User] · 9 January at 10:04AM

Morning. I hope you are well. My only comment is that you may not have taken inflation into account when assuming £10000 a year will be enough for the next two years.

In what year does your first pension become payable?

I know we are all different, but would you ever consider some very part-time work or even something seasonal to boost your income a little?

Have you estimated how much savings you would have after the age of 67? As a house owner, having a standby fund of at least £10000 is, in my view, essential.

The interest rates you mention look ok. However, their real value will depend on inflation over the next two years.

Just a few questions lol! The intention is not to worry you, but to encourage you to look at all options. After all we all need to be challenged a little when thinking things through.

Best wishes as always.

Skint_yet_Again · 9 January at 11:05AM

Thanks for your thoughts @[Deleted User]

I don’t intend to work. Especially at the moment with the freezing weather and I want to spend the summer with family. My first pension starts in 3 years with lump sum. I do have a little leeway in my monthly budget and could use the monthly interest if needed. I could stretch my 4 week food budget to last 5 weeks if necessary. That would give me approx £100 extra per month for any increased monthly expenses. Annual Insurances / annual bills are more than covered by my monthly savings pot £100 per month.

After 67 I should have about £10k left, not counting my pension lump sum which may be used to replace my car. The annual interest will be 50% saved and 50% used on home updates. My income should jump to £17k after tax at age 67.

I think I will be able to live well on £10k a year for the next 2 years but it may need to be recalculated after that. This year my car insurance is cheaper, my breakdown cover has remained the same. House insurance is up by £8.02. Just waiting for fuel bill (currently £370.69 in credit), plus council tax, water & car tax to see how much they are increasing.

It is good to have other people’s comments to see a different take on things. I wish we knew whether interest rates were going down. I am assuming so at present?

Moneywhizz · 9 January at 6:54PM

Your budgeting and money management is a great example of how you can have a good life on a limited income. You have worked everything out so precisely and look to have everything covered. If you are thinking you will still have £10k left by the time you reach 67, you obviously have enough to meet any emergencies that may arise. You have proved that you can live comfortably on £10000 and though costs may increase it looks as if you will make it to 67 without any problem. Then you can splash out on things that you may have chosen to do without so that you could fund your early retirement. Glad that it is all going well for you.

jwil · 9 January at 7:52PM

I also think you do amazingly well on a low budget.

Skint_yet_Again · 9 January at 8:21PM

Thanks @Moneywhizz and @jwil I appreciate your support. 😊 I may have less equity left if they increase the state pension age to 68 but hopefully not!

I went food shopping at aldee this morning total spend £42.79 including a few items that will last more than one week (mayo, hot choc, peach squash, butter, frozen spinach, washing up liquid).

Went for a walk down to my friends house for a cuppa this afternoon but started feeling unwell this evening. Am hoping it’s not a bug 🤞Have just had some butternut squash soup and a couple of paracetamol.