Average household expenditure by Age

Phossy

In my continuing quest for data to pore over as I refine my pension planning, I came across this UK household expenditure 2022 by age | Statista.

I probably like it as it confirms my current bias towards taking as much out of my pension as I can early on, though the likelihood is that it's just a reflection of income by age (which in itself is also interesting)

On-the-coast

correlation - or causation?
probably a bit of both, but I’m sure there are plenty of retired households that would like to spend more. 

LHW99

On-the-coast said:

correlation - or causation?
probably a bit of both, but I’m sure there are plenty of retired households that would like to spend more. 

And equally many that are happy to spend less (either because they are fearful, or their general lifestyle doesn't include expensive activities).

Linton

Phossy said:

In my continuing quest for data to pore over as I refine my pension planning, I came across this UK household expenditure 2022 by age | Statista.

I probably like it as it confirms my current bias towards taking as much out of my pension as I can early on, though the likelihood is that it's just a reflection of income by age (which in itself is also interesting)

Another way to look at overall retirement expenditure without relying on other people's averages is to assume that you continue with your current level of day to day expenditure throughout retirement and explicitly budget for expensive one-offs - eg holiday somewhere exotic every few years until say 80 whilst you are healthy.

It would be foolish in my view to get yourself used to an enhanced standard of living in the early years and have to give it up later through lack of money.

In any case the chances are that within a view years of retirement your finances will be very different to any plans you made beforehand.   Either an extended early crash will have decimated your savings or few of the calamities you planned for will have happened and you end up far richer than you ever thought possible.  Assuming you have planned prudently, the latter outcome is I believe rather more likely.

barnstar2077

Linton said:

Phossy said:

In my continuing quest for data to pore over as I refine my pension planning, I came across this UK household expenditure 2022 by age | Statista.

I probably like it as it confirms my current bias towards taking as much out of my pension as I can early on, though the likelihood is that it's just a reflection of income by age (which in itself is also interesting)

Another way to look at overall retirement expenditure without relying on other people's averages is to assume that you continue with your current level of day to day expenditure throughout retirement and explicitly budget for expensive one-offs - eg holiday somewhere exotic every few years until say 80 whilst you are healthy.

It would be foolish in my view to get yourself used to an enhanced standard of living in the early years and have to give it up later through lack of money.

In any case the chances are that within a view years of retirement your finances will be very different to any plans you made beforehand.   Either an extended early crash will have decimated your savings or few of the calamities you planned for will have happened and you end up far richer than you ever thought possible.  Assuming you have planned prudently, the latter outcome is I believe rather more likely.

This makes sense if you can afford to do so, but if your resources are limited, then front loading the first ten to fifteen years of your retirement also looks like a valid option to me.  I feel like I am more likely to make it to 77 than I am 97, and much more likely to enjoy the extra spending money earlier too.

If I don't feel fit enough to travel into my eighties, the chances are I won't be spending much money in general.  Although some help with chores and the garden etc would probably come in handy by then, but you can't have everything (unless you are lucky, or your preparations have been exceptional.) 

As it happens, no one surveyed me for this report, as even in my forties my weekly spend is far below that of the lowest spending age mentioned on here! :  )

thriftytracey

Surely when you reach a certain age you will need to pay for gardening, DIY jobs that you used to be able to do,  cleaning and finally a carer?

Nebulous2

There will be considerable variation - but that matches much of what I have read. People spend less in retirement than they expect to, and often continue to accumulate equity, rather than deccumulate. 

hugheskevi

thriftytracey said:

Surely when you reach a certain age you will need to pay for gardening, DIY jobs that you used to be able to do,  cleaning and finally a carer?

That is likely, although many would benefit from moving to a smaller and much lower maintenance property as they age, probably around 75-80ish but heavily depending on health. That is likely to release capital which can be used to pay for help, and also reduce maintenance requirements.

Unfortunately, most don't move, leaving many living in inappropriate housing as they become less able.

MarzipanCrumble

hugheskevi said:

thriftytracey said:

Surely when you reach a certain age you will need to pay for gardening, DIY jobs that you used to be able to do,  cleaning and finally a carer?

That is likely, although many would benefit from moving to a smaller and much lower maintenance property as they age, probably around 75-80ish but heavily depending on health. That is likely to release capital which can be used to pay for help, and also reduce maintenance requirements.

Unfortunately, most don't move, leaving many living in inappropriate housing as they become less able.

There is little incentive to move in the area I live.  I have a 4 bed house (yes, too big for me alone).  It has cavity wall insulation and loft is fully boarded and insulated.  My energy bills are low.  I have a wood burning stove which I love.  My council tax is low for the type of house - I do look and am surprised that it is less than some more renovated properties.

My house is in a location that is highly desireable with a great view over a man-made lake with wild fowl, and 3 ish miles from city centre.  Yes, public transport isn't great (even in a city).  

If I moved - removal costs, stamp duty, probably higher council tax, conveyancing and estate agent fees - all this would eat into any equity I might release from a move.  Also maybe better public transport but instead of looking over a lake I would be viewing the houses on the oher side of the road.  Other considerations (which don't really apply to me - prob on autistic spectrum anddon't relate to ppl well) is loss of neighbours you have a connection with.