Pension stuff, how's it all looking ? HAve you prepared ?

[Count Steer]

Hold on a sec. Without a mortgage you think £3000 a month is a minimum and £5000 a month comfortable?

They seem very high to me.

I've just trawled through a typical month of bank transactions.

House (tax, energy, water, phone/BB/mobiles, insurance) - £820
Shopping (food, coffees, consumables - no clothes, tools etc etc) - £800
Petrol - £124

So that's £1744 gone.

Apart from petrol there's nothing in there for car insurance, maintenance....or purchase. Nothing for clothes, TV licence, streaming etc or towards stuff for the house, I've ignored Amazon, Screwfix outgoings that month and optionals like Spotify and dental insurance). If you haven't got a decent kitty you'll need to save towards stuff like cars, bicycles, house repairs, decorating, holidays. (Knee replacements? ).

Sure, two can live on less than £3k a month, but I wouldn't want to.

[Mr. Dazzle]

You wanna cut back in the fois gras, that'll see you reet

[Count Steer]

You wanna cut back in the fois gras, that'll see you reet

I was a bit surprised by the food+ £s but, it did include one of our occasional Ocado deliveries where we stock up on store cupboard stuff as well as the scran for the week....that was £189 It really is an all-in figure based on transactions to 3 supermarkets and a café. People might get a surprise if they do the exercise.

Oh yeah....there's absolutely £0 in the figures up there ^^^ for meals out, of any sort.

PS. There's no booze of any sort in the numbers either.

[Zimbo]

I did a huge spreadsheet, took all our current living costs (not including mortgage) which came to £34K/year when you include a couple of holidays and a couple of grand for contingencies plus a "reasonable" amount of discretionary spending each (£250/month each seemed reasonable). I increased it year on year by an estimated inflationary amount (just under 3%), which takes it £46K/year in ten years time and £57K in twenty years time, £73K/year in thirty years time and so on. The compounded effects of inflation are a bit scary!
I then took our current savings and investments and increased their value year on year based on expected returns, factored in the missus's final salary pension that she's already drawing (plus forward inflationary adjustments), 2 x full state pensions when we reach that age (again, inflation adjusted, using the same inflation figure I based our spending on) and used that to work out when we can stop working, which was actually much sooner than we expected. It was a very useful (and satisfying) exercise, I redid twice more to "sanity check" the figures, and we are fairly happy with it - as long as inflation, savings rates and share dividends stick to reasonable levels! I deliberately didn't factor in inheritance as a safety buffer.
Based on the better than expected result, we both dropped to working three days a week, which has been brilliant, missus's pension makes that possible.

[Yorick]

Council tax plus tax for all the vehicles is total of €800.
Zero heating bill.

Food is cheap and we don't need to buy lots of clothes.
Don't need holidays to the sun
Fuel is €1.30

We had to move away from UK to retire early

[mangocrazy]

The only thing that gives me the hump is the £5k special allowance that disappears entirely once you earn a pound in income that comes from paid employment, so you can quite literally be worse off because you work.

Do you have a link for info on that?

All I can see on .gov is:
Your tax-free Personal Allowance
The standard Personal Allowance is £12,570, which is the amount of income you do not have to pay tax on.

Your Personal Allowance may be bigger if you claim Marriage Allowance or Blind Person’s Allowance. It’s smaller if your income is over £100,000.

I'm drawing a final salary type pension, and will get the state pension later this year.

But I also work part-time - and won't get anywhere near enough to cover £5k, whether as additional tax-free or anything else.

I'd definitely like to know more about 'the £5k special allowance'...

[Count Steer]

I did a huge spreadsheet, took all our current living costs (not including mortgage) which came to £34K/year when you include a couple of holidays and a couple of grand for contingencies plus a "reasonable" amount of discretionary spending each (£250/month each seemed reasonable). I increased it year on year by an estimated inflationary amount (just under 3%), which takes it £46K/year in ten years time and £57K in twenty years time, £73K/year in thirty years time and so on. The compounded effects of inflation are a bit scary!

Yeah. I forgot to mention inflation. For the lump sum scenario that lump probably shrinks while the costs keep rising (unless it's a jolly large lump ). Even 'inflation adjusted' pensions haven't really matched recent, real world, rises. (Reading today that food prices have actually risen 31% since, iirc, December 21 (equivalent to about 15 years before that). Car insurance and maintenance has jumped incrementally too).

[Mr Moofo]

I did a huge spreadsheet, took all our current living costs (not including mortgage) which came to £34K/year when you include a couple of holidays and a couple of grand for contingencies plus a "reasonable" amount of discretionary spending each (£250/month each seemed reasonable). I increased it year on year by an estimated inflationary amount (just under 3%), which takes it £46K/year in ten years time and £57K in twenty years time, £73K/year in thirty years time and so on. The compounded effects of inflation are a bit scary!

Yeah. I forgot to mention inflation. For the lump sum scenario that lump probably shrinks while the costs keep rising (unless it's a jolly large lump ). Even 'inflation adjusted' pensions haven't really matched recent, real world, rises. (Reading today that food prices have actually risen 31% since, iirc, December 21 (equivalent to about 15 years before that). Car insurance and maintenance has jumped incrementally too).

One slightly philosophical view - as you get older you also spend a lot less. Inflation is a bitch but high disposable income lifestyle decreases with age - once you get to 60 the thought of jumping on a flight to Ibiza for a 4 day bender of drink, drugs and carnal pleasures doesn't have the same appeal or priority as when in you 20s

[Count Steer]

I did a huge spreadsheet, took all our current living costs (not including mortgage) which came to £34K/year when you include a couple of holidays and a couple of grand for contingencies plus a "reasonable" amount of discretionary spending each (£250/month each seemed reasonable). I increased it year on year by an estimated inflationary amount (just under 3%), which takes it £46K/year in ten years time and £57K in twenty years time, £73K/year in thirty years time and so on. The compounded effects of inflation are a bit scary!

Yeah. I forgot to mention inflation. For the lump sum scenario that lump probably shrinks while the costs keep rising (unless it's a jolly large lump ). Even 'inflation adjusted' pensions haven't really matched recent, real world, rises. (Reading today that food prices have actually risen 31% since, iirc, December 21 (equivalent to about 15 years before that). Car insurance and maintenance has jumped incrementally too).

One slightly philosophical view - as you get older you also spend a lot less. Inflation is a bitch but high disposable income lifestyle decreases with age - once you get to 60 the thought of jumping on a flight to Ibiza for a 4 day bender of drink, drugs and carnal pleasures doesn't have the same appeal or priority as when in you 20s

We just save up for hips and knees instead.

[Horse]

One slightly philosophical view - as you get older you also spend a lot less. Inflation is a bitch but high disposable income lifestyle decreases with age

Pre-covid, perhaps. But, for me, my 'work' costs altered substantially. Being at home meant almost no travel costs. Even down to less electricity from not having to iron shirts.

But heating and lighting increased. And extras such as toilet paper ... ;

[Horse]

The only thing that gives me the hump is the £5k special allowance that disappears entirely once you earn a pound in income that comes from paid employment, so you can quite literally be worse off because you work.

Do you have a link for info on that?

All I can see on .gov is:
Your tax-free Personal Allowance
The standard Personal Allowance is £12,570, which is the amount of income you do not have to pay tax on.

Your Personal Allowance may be bigger if you claim Marriage Allowance or Blind Person’s Allowance. It’s smaller if your income is over £100,000.

I'm drawing a final salary type pension, and will get the state pension later this year.

But I also work part-time - and won't get anywhere near enough to cover £5k, whether as additional tax-free or anything else.

I'd definitely like to know more about 'the £5k special allowance'...

@Potter

[Taipan]

Yeah. I forgot to mention inflation. For the lump sum scenario that lump probably shrinks while the costs keep rising (unless it's a jolly large lump ). Even 'inflation adjusted' pensions haven't really matched recent, real world, rises. (Reading today that food prices have actually risen 31% since, iirc, December 21 (equivalent to about 15 years before that). Car insurance and maintenance has jumped incrementally too).

One slightly philosophical view - as you get older you also spend a lot less. Inflation is a bitch but high disposable income lifestyle decreases with age - once you get to 60 the thought of jumping on a flight to Ibiza for a 4 day bender of drink, drugs and carnal pleasures doesn't have the same appeal or priority as when in you 20s

We just save up for hips and knees instead.

I’m ahead of the game there!

[JackyJoll]

The only thing that gives me the hump is the £5k special allowance that disappears entirely once you earn a pound in income that comes from paid employment, so you can quite literally be worse off because you work.

Do you have a link for info on that?

All I can see on .gov is:
Your tax-free Personal Allowance
The standard Personal Allowance is £12,570, which is the amount of income you do not have to pay tax on.

Your Personal Allowance may be bigger if you claim Marriage Allowance or Blind Person’s Allowance. It’s smaller if your income is over £100,000.

I'm drawing a final salary type pension, and will get the state pension later this year.

But I also work part-time - and won't get anywhere near enough to cover £5k, whether as additional tax-free or anything else.

Can anyone claim Blind Person’s Allowance or do you have to be blind?

[Taipan]

Council tax plus tax for all the vehicles is total of €800.
Zero heating bill.

Food is cheap and we don't need to buy lots of clothes.
Don't need holidays to the sun
Fuel is €1.30

We had to move away from UK to retire early

My mare retired early (injured fireman ffs!) and moved to Murcia and said pretty much the same thing. It’s much cheaper to live there,than here, so your money goes further. I’d go for the weather, but stay for the savings!

[Pirahna]

Council tax plus tax for all the vehicles is total of €800.
Zero heating bill.

Food is cheap and we don't need to buy lots of clothes.
Don't need holidays to the sun
Fuel is €1.30

We had to move away from UK to retire early

My mare retired early (injured fireman ffs!) and moved to Murcia and said pretty much the same thing. It’s much cheaper to live there,than here, so your money goes further. I’d go for the weather, but stay for the savings!

Car tax is paid to the local council so gets included on the council tax bill (suma). Both of my vehicles were registered last year so no tax is due on them until this year. My council tax last year was €316.01, plus another €43.18 for bins (I don't get bin collections, this pays for the big paladin bins that are dotted around in various places). The council tax on my old UK house is over 10 times this.

Despite such a low rate of council tax there is a steady stream of free cultural events, the roads are in great shape, everything seems to work.

[Yambo]

I don't know what you guys are earning now or were earning immediately before retirement but jeez, you think £60k a year for doing nothing is just about right?

Wow

My state pension is paid directly into my Turkish bank (I have to suffer the rate of exchange on the day but that is currently in my favour). The pension is lower than the minimum state pension quoted by the government as I'm 4 months too old for that and I was opted out of SERPS for 23 years (not voluntarily) while playing soldiers.

However, I can live quite comfortably on that meagre amount. OK, I'm single with no mortgage, my regular bills - water, electric, phone/internet are no way as expensive as in the UK but I can have a beer or two when I want to, eat out once a week with M and pay the bill and still buy a pile of sanding discs for prepping my boats for summer. I enjoy life.

My other pensions, one of them is only £53 a month pays for holidays, hobbies, hip replacements etc. I don't have a car though because it would just be sat there most of the time bleeding money. I work around the shit winter bus service or get a lift into town in some other expats status symbol.

I really don't think a lot of you guys understand retirement or at least, we see it completely differently.

[Horse]

I'd definitely like to know more about 'the £5k special allowance'...

@Potter

You need to get a proper advisor, but this will give you a start.

https://www.moneysavingexpert.com/savin ... allowance/

"If you earn less than £17,570, the starting savings rate allows you to earn up to £5,000 in savings interest completely tax-free. This is in addition to your personal income tax allowance and personal savings allowance.

How much of the £5,000 allowance you get depends on how much you earn and can be quite comple"

From those, it's not an absolute 'earn a single paid penny' cut-out that you implied.

Isn't it the case that earning means 'income', e.g. pension payments are taxable if over the basic limit?

[Count Steer]

I don't know what you guys are earning now or were earning immediately before retirement but jeez, you think £60k a year for doing nothing is just about right?

Wow

LOL. It's not for 'doing nothing' it's money arising from doing rather a lot. State and company pensions aside (which aren't 'free', we put money in) a fair chunk of ours is money we earned and saved. Pleasure deferred if you like.

We studied/trained and worked hard, moved jobs, moved locations, earned decent money and planned ahead. (Managed to enjoy ourselves most of the time too ). I see no reason why that means we should be living on gruel in a hovel.

PS Oh yeah we paid and still pay taxes, so we aren't a total drain on society.

[Mr. Dazzle]

I think it's called textured insect protein actually. You should be greatful for your Amazon allocated Prime Hovel too.

[weeksy]

I don't know what you guys are earning now or were earning immediately before retirement but jeez, you think £60k a year for doing nothing is just about right?

Wow

LOL. It's not for 'doing nothing' it's money arising from doing rather a lot. State and company pensions aside (which aren't 'free', we put money in) a fair chunk of ours is money we earned and saved. Pleasure deferred if you like.

We studied/trained and worked hard, moved jobs, moved locations, earned decent money and planned ahead. (Managed to enjoy ourselves most of the time too ). I see no reason why that means we should be living on gruel in a hovel.

PS Oh yeah we paid and still pay taxes, so we aren't a total drain on society.

I think it's simpler than that mate in truth, the pension is 'savings' so you're only spending your savings, not spending something 'free' ... It's all savings we've accumulated over the last 20-40 years. Everyone (until recently) had the option whether to enter into a pension, so it was a choice thing for us to 'save'... I'm notoriously bad at saving, so this was a god-send for me.