Frugal in retirement

Nonnadiluca · 1 January 2019 at 12:14PM

I was born in October 1953 so was affected by both changes in pension age. When in my late 40s I had a letter to tell me that I would be getting my state pension at 62 and 5 months rather than at 60 because of equalising the pension age for men and women. I was fine with this: the concept seemed fair as did the staggering of the change of age for those of us born between 1950 and 1955. Also I had plenty of time to plan. Then, out of the blue, with no communication from DWP, I find out from the news that, because I was born after April 1953, I had to wait longer, I contacted DWP and found that I now had to wait until I was 64 and 9 months! No time to plan but the worse thing for me was the unfairness of it. My friend who is 11 months older than me got her state pension nearly 5 years before me, how is this fair? I stopped working at 62 as I wasn't well enough to work and things have been tough as DH doesn't earn a lot. Still, now I am finally getting my pension I feel quite well off!

Goldiegirl · 1 January 2019 at 4:55PM

I've been early retired for 4 years, and have no regrets at all.

For the first 18 months, we did live quite frugally, on my work pension and my husband's personal pension. After that, my husband started getting his state pension, which has helped a lot. It means we can put money aside for home improvements - last year we revamped the lounge and dining room, and this year we intend updating our bathroom, decorating our bedroom and maybe the hall and stairs, funds permitting.

On a day to day basis, we live modestly rather than frugally, and use our pre-retirement savings for holidays.

Our finances will improve again when I get my state pension, which will be in 7 years time. I see some comments have been made about Waspi and the other splinter groups. Waspi apparently think it's fine for me to get my state pension at age 66!

On the subject of State Pension, I suggest everyone gets a state pension forecast, so they know how much to expect. If you had an occupational pension and were contracted out of SERPS, you'll probably find your forecast amount is less than the New State Pension amount of £164.35. However, if you continue to pay National Insurance until your state pension age, you can increase your SP to the full £164.35. If you are not working, you can pay voluntary NI. It's something for people to consider if they retire from work early

Gers · 1 January 2019 at 7:40PM

About NI contributions - if you're a non-working grandparent giving childcare to your own grandchildren you can claim NI free of charge up to SPA.

There's more detailed info a-plenty on the pensions board and gov.uk.

Edited to add https://www.gov.uk/government/publications/national-insurance-credits-for-adults-who-care-for-a-child-under-12-fact-sheet/specified-adult-childcare-credits-fact-sheet

Not just a grandparent, other family members too.

cuddlymarm · 3 January 2019 at 10:44PM

Hi guys
Well today had been extremely chilly and grey here so I’ve had a slow lazy day. My online shop arrived, I was very good and only bought what was absolutely necessary, no treats, all healthy. I always feel better when my cupboards are full, I think I’ve been a hamster in a previous life.
What was left in my bank account has been knocked off the credit card because I get paid tomorrow.
I need to be extra good because we have a holiday booked for July and then another booked for next March. When they need paying for will come up very quickly. We don’t smoke, don’t drink very often but do so like to travel.
A bonus today was that when I weighed in at SW I’d lost 2 lb since I went last week. I’m really happy about that cos neither of us had been that good.
I hope you are all keeping well, there seems to be a lot of colds around at the moment.
Anyway I’m on work early tomorrow so better go
Keep warm and well
Cuddles

plumduff55 · 4 January 2019 at 10:25AM

Hi, I've just done my sums for all spending in 2018 and I'm shocked. I've been retired for just over 3 years and another nearly 3 years till I get my state pension. My spending was all going to plan but last year I've gone a bit crazy and my savings account has taken a real hit. I should have realised that it would be difficult to keep to such a strict plan for 6 years and that as time went on things would wear out and need replaced. Here's my key problem areas.

HolidaysI love travelling and more importantly looking forward to travelling so no last minute deals for me. Last year I went on 7 short breaks within the UK, 6 days to New York and 1 month to Australia. In my defence ;)4 of the short breaks were to my eldest son who lives 400 miles away, so even with a railcard the fare costs about £100 each time. The trip to Australia was a last minute unplanned for holiday due to a family crisis. I would never have gone to NY after going to Australia but it had been booked for nearly a year and I couldn't let my friend down. I don't regret any of my trips just the fact that I've spent so much. This year I have promised a friend I'd go to Poland with her. We'd both like to see Auschwitz. Another friend has asked me to go to Spain with her and it'll only cost daily food and the flights. I will also be going to visit my son a few times.

CarIn April I replaced my very old car that I loved for a 3 year old car of the same model. For some reason ( I know it's crazy) I just don't like this car. I hardly drive it - on average 70 miles a month. I use my bus pass when travelling to nearby towns or when visiting younger son. I have never really liked driving and the less I drive the more I dislike it. I am now trying to decide whether to get rid of the car altogether. I could happily exist without driving but worry that my mobility due to Arthritis may worsen and then I'd really need a car. Decisions decisions

House When I retired I spent money from my lump sum on a new roof, new central heating etc so all the major possible problems have all been taken care of. But some rooms are now showing signs of age and could be doing with a lick of paint. Before I could have done the painting myself but now I'll need to pay someone to do it. The garden also needs some work done that will cost money.

I use £128 from my savings each month towards living costs. I also use savings for all extras including travel, car, household repairs etc. I am lucky that I have these savings but they are my rainy day savings and I find it really difficult to see them reducing so much. I have re calculated my budget for 2019 and hope by doing so that I can cover the Spanish holiday and visiting my son from my everyday spending rather than savings. The Poland holiday would have to be paid from savings. Part of me thinks I should just stop the holidays but I do love travelling and am afraid if I wait till I have more money when I get my state pension I may not be physically able to travel.

Any help/advice would be greatly appreciated xx

Goldiegirl · 4 January 2019 at 1:30PM

I relate to what you are saying, Plumduff, as we are also using savings for holidays.

It's a very personal thing, to get the balance right between savings and spending.

Like you, I don't regret any of the holidays that I've been on, and that persuades me that, for us at least, we are doing the right thing by having the holidays now. Life can change quickly, and I don't want to get to a point where I regret not doing things while I had the chance.

We got a new car nearly 4 years ago, shortly after we retired, and so far we've done about 4800 miles in it. I have toyed with the idea of getting rid of it, and working out how much taxis would cost for the places we need to get too. However, so far, the convenience of having the car outweighs any possible savings we might make by getting rid of it. In the last couple of weeks, my husband had some problems with his eye, and needed two appointments at Maidstone Eye Hospital. It was so easy just to go by car, rather than think about taxis or working out how to get there by train and bus. At present the car is staying.

Not to mention the house. We've got an ongoing programme of improvements - the idea being that once it's all done, we won't have to do it again, ever!

There's no easy answer, but I sometimes have to tell myself that we worked hard throughout our lives to put money by for a rainy day, and the rainy day has now arrived, and we can spend and enjoy it.

Hopefully you'll find the balance that is comfortable for you

(the Polish trip sounds very interesting.)

buildersdaughter · 4 January 2019 at 1:45PM

I'm not sure how to advise on the 'balance' of spending / keeping savings, but I do have some advice on the car.
Some years ago (and I'm sure you can look it up on a site like the AA / ETA) I was told that simply keeping a car on the road - tax, insurance, maintenance, deterioration etc. came to about £2,000 a year. That's money that can be spent on fares, taxis - and hire cars. I know that some people really don't like driving hire cars, but i find they are usually small & easy. So I might be tempted, in plumduff's situation, to give up the car, hire one occasionally to keep up the skill, and see how it goes.

lessonlearned · 4 January 2019 at 1:50PM

Hi Plumduff....your post really resonated with me too. I share quite a few of your dilemmas, whether to keep car or get rid, to reduce holidays or keep travelling.....just how much I am prepared to spend on the money pits renovations. :rotfl:

I have decided not to make any firm decisions but to keep an open mind, to monitor my spending really carefully and to try and increase my income.

I have joined the make £2019 in 2019 to spur me on and try and find new sideline hustles to make some extra money. I am going to undertake a major declutter, selling as much as I can. If it won't sell then I shall just donate and get rid anyway.

I have vowed not to buy any clothes, books etc for 6 months. I have wardrobes full of clothes and I shall rejoin the library instead of using amazon as my personal lending library.

I have also challenged myself not to spend quite so much on groceries. I definitely I think I can make some savings there. No more nipping out for milk and spending £20 on nothing. :rotfl:

I am going to try and do some decorating myself to cut down on renovation costs. Like you I'm starting to struggle a bit but I'm afraid I really can't justify employing a decorator. I shall keep it simple sticking to neutral colours. I figure if I can only manage to paint a wall a day, it doesn't matter I will get there in the end. There's no real rush. Same with the garden. Little and often.

I agree with Goldiegirl, it's about balance. Yes we need to be careful but we also need to live rather than exist. I am determined to still travel, get out and about, and have some fun, just need to do it on a tight budget.

cuddlymarm · 4 January 2019 at 2:24PM

Hi guys
Travel is our hobby. I have a long bucket list that just keeps growing but that’s half the fun.
I still work part time to allow nice holidays because we are both 10 years away from our state pension and also it keeps me busy.
We live quite frugally because that is quite natural to us anyway and don’t smoke or drink much. We don’t eat out much either.
I think you have to decide what is most important to you really.
Cuddles

dreaming · 4 January 2019 at 3:07PM

plumduff55 wrote: »

Hi, I've just done my sums for all spending in 2018 and I'm shocked. I've been retired for just over 3 years and another nearly 3 years till I get my state pension. My spending was all going to plan but last year I've gone a bit crazy and my savings account has taken a real hit. I should have realised that it would be difficult to keep to such a strict plan for 6 years and that as time went on things would wear out and need replaced. Here's my key problem areas.

. I could happily exist without driving but worry that my mobility due to Arthritis may worsen and then I'd really need a car. Decisions decisions

Hi, I read along on this thread as I took early retirement four and a half years ago. I also took redundancy from my job (which was relocating) so could pay off the mortgage and put some money aside until SP kicked in (due in 2021), but I did take my works pension. Having looked at my figures for 2018 I was very concerned to realise that over £20k of my savings has been spent during those four and a half years. Some of it I can account for by work done on the house and garden (some 4 grand last year alone on necessary repairs), and I also had to support my eldest child for a lot of that time following a mental breakdown just after my retirement, but that is now hopefully sorted.
So I have resolved to try to end 2019 with at least as much savings as I started with. I don't do holidays (because I don't enjoy them rather than can't afford them) but my spending on hobbies crept up quite a bit last year. Food bills need to be reduced quite a bit which will help with weight loss hopefully, and I can see that I blew the "gifts" budget by about 25%, but there is still a big hole which I guess is just everyday "mindless" spending. I will keep my car as I do budget for that. It is getting to the age where it is likely to start costing a bit more each year, but I have just cancelled RAC breakdown (£168 to renew) and taken out one for £40. Gas/electric direct debit has been reduced as I was massively in credit (despite having a refund 6 months ago), and it seems my monthly water dd has reduced from this month. With the 2 council tax free months I am hopeful I can get back to living within my works pensions again, and save a little as well.

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Frugal in retirement

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