Retirement Living Standards in the UK: 2024 update published

Albermarle

artyboy said:

I always look at these figures and note the paradox between me being on the one hand a total MSE (I just spent 30 minutes cancelling and rebooking a car hire to save a fiver), and on the other a total spendthrift. Because in my book, £60k in retirement for Mrs Arty and me won't be especially comfortable! 

I guess if we live long enough and these figures are an averaging over the years, it might well be accurate, but I'm intending to get out and travel loads, treat the (already spoilt) kids a lot, eat out well etc etc, and it's surprising how quickly that adds up, especially sitting at the pointy end of the plane...

This sort of matches with my usual comments on these figures.
Although £60K seems a lot ( and is more than what we spend) it is not enough to support any kind of real luxury lifestyle. You would need £60K each to even get close.

However with unused pension pots coming under IHT, then as someone who will almost certainly be affected by this ( or my heirs will)  I for one have started to loosen the purse strings ( a bit) as every extra expenditure basically comes with a 40% discount !

Ibrahim5

Sitting at the pointy end of the plane is of course the most dangerous place to be. Any sort of a bump and all this discussion will be irrelevant.

FIREDreamer

Albermarle said:

artyboy said:

I always look at these figures and note the paradox between me being on the one hand a total MSE (I just spent 30 minutes cancelling and rebooking a car hire to save a fiver), and on the other a total spendthrift. Because in my book, £60k in retirement for Mrs Arty and me won't be especially comfortable! 

I guess if we live long enough and these figures are an averaging over the years, it might well be accurate, but I'm intending to get out and travel loads, treat the (already spoilt) kids a lot, eat out well etc etc, and it's surprising how quickly that adds up, especially sitting at the pointy end of the plane...

This sort of matches with my usual comments on these figures.
Although £60K seems a lot ( and is more than what we spend) it is not enough to support any kind of real luxury lifestyle. You would need £60K each to even get close.

However with unused pension pots coming under IHT, then as someone who will almost certainly be affected by this ( or my heirs will)  I for one have started to loosen the purse strings ( a bit) as every extra expenditure basically comes with a 40% discount !

I am annuitising the lot. I did 70% in 2023 and am annuitising the rest now. Avoids inheritance tax complications. They can have the house and ISA when we are gone.

Puts me in 40% tax now unfortunately, before SPA, but I can get 40% relief on the £3,600 allowable future contributions as I have some LSA left.

Exodi

Ibrahim5 said:

'Wrap of the day' from McDonald's is actually quite good, and good value too. £2.

Agreed, though they destroyed every related offering a few years ago.

E.g. a wrap of the day used to be £1.99 and a meal (medium fries + drink) would be £2.99. Other wraps were £2.99 with a meal being £3.99.

Now, while the wrap of the day is still £1.99 but a meal is £6.09. Other wraps are £5.49 with a meal being £7.49.

I suspect only the royal family can afford to eat at McDonalds in 2025.

To stay relevant to this discussion, I think it's important to consider that the figures provided are likely averages.

So the 'younger' retirees who are going on 50 holidays a year inevitably might consider the figures a bit low.

The 'older' retirees who's only spending is on groceries and giving money to grand-kids might consider the figures insanely high.

In reality, drawdown is unlikely to be linear or simple, but I appreciate why they would present it like this.

artyboy

Albermarle said:

artyboy said:

I always look at these figures and note the paradox between me being on the one hand a total MSE (I just spent 30 minutes cancelling and rebooking a car hire to save a fiver), and on the other a total spendthrift. Because in my book, £60k in retirement for Mrs Arty and me won't be especially comfortable! 

I guess if we live long enough and these figures are an averaging over the years, it might well be accurate, but I'm intending to get out and travel loads, treat the (already spoilt) kids a lot, eat out well etc etc, and it's surprising how quickly that adds up, especially sitting at the pointy end of the plane...

This sort of matches with my usual comments on these figures.
Although £60K seems a lot ( and is more than what we spend) it is not enough to support any kind of real luxury lifestyle. You would need £60K each to even get close.

However with unused pension pots coming under IHT, then as someone who will almost certainly be affected by this ( or my heirs will)  I for one have started to loosen the purse strings ( a bit) as every extra expenditure basically comes with a 40% discount !

£60k+ each is where my mind is currently at. Barring expatriation, I'm definitely resigned to the fact both of us could nudge into being 40% taxpayers in retirement, just to manage down our IHT exposure, and at a minimum not end up losing our RNRBs through tapering. 

If that means enduring more weekends away at Le Manoir, then I'm sure the kids will understand  

Oh, and I wasn't intending to bring this back round to yet another whinge about pensions and IHT, but you started it... 

JoeCrystal

Exodi said:

So the 'younger' retirees who are going on 50 holidays a year inevitably might consider the figures a bit low.

The 'older' retirees who's only spending is on groceries and giving money to grand-kids might consider the figures insanely high.

In reality, drawdown is unlikely to be linear or simple, but I appreciate why they would present it like this.

Ha, it would be very expensive luxury to go on holiday every week! Do you mean five holidays per year? 

I did read somewhere that the cost tend to be a shape of an "U" high costs to enjoy retirement then low cost to settle and then potentially high cost in care.

Exodi

JoeCrystal said:

Exodi said:

So the 'younger' retirees who are going on 50 holidays a year inevitably might consider the figures a bit low.

The 'older' retirees who's only spending is on groceries and giving money to grand-kids might consider the figures insanely high.

In reality, drawdown is unlikely to be linear or simple, but I appreciate why they would present it like this.

Ha, it would be very expensive luxury to go on holiday every week! Do you mean five holidays per year? 

I did read somewhere that the cost tend to be a shape of an "U" high costs to enjoy retirement then low cost to settle and then potentially high cost in care.

No it was just deliberate vacuous exaggeration on my part.

Your 'U' point is exactly the point I was making though. People that are currently living at the peaks of the U may find these numbers too low, whereas people living in the troughs may well find them unrealistically high. That might be why we also get a thread full of people vehemently  disagreeing whenever these sorts of numbers are released.

Silvertabby

We are inbetweenies, but much nearer 'comfortable' than 'moderate'.

These charts are very general, and all seem to assume that better off pensioners spend a fortune on holidays.  We don't  - we got the travelling bug out of of systems during our RAF days, and prefer to spend our money on something more permanent that we can enjoy all year round.  

Not MSE, I know - but that includes a brand new car every 5 years.  The pleasure of being able to choose exactly the make, model, specs, colour etc we want is priceless.

We both have hobbies that can cost a fair amount of money, and I like knowing that I can pop into our local garden centre just for a look and come out with any plants etc that take my fancy.

And, yes, I do most of my weekly shop in our M&S foodhall.  Being able to pop anything I want into my trolley, usually without even looking at the price, is a luxury that my late dear mum would never have been able to dream about.

We are all so very different.

eastcorkram

Pretty much zero holiday spend here too. Unless you count the occasional one night away after a show, if it's logistically easier.

 On a joint pension income of around £60k gross, split roughly 50/50. Well, it will be once SP  kicks in towards the end of this year. 

DT2001

The findings have been used in an article in The Times today and resulted in similar comments about the relevance to the readers.
The figures are a starting point and hopefully lead people onto further analysis of their own circumstances. It is very much each to their own. OH loves travel and I am sure we’ll be close to £20k some years but despite having the money we, I think, are to set in our ways to turn left on the plane (not value for money, in our eyes). We do house swaps when we can so the budget extends a long way (£5k for a month last year in Aus and NZ). We rarely eat out and have a 12 year old car. We will be gifting lump sums and excess income (if the global stock markets perform even moderately) to avoid losing RNRB.