Pension income

I completely agree that "are you saving enough for your retirement" articles are written by people who want to make money from you.

For most people it's a balance between their financial commitments when they have young family against saving for a comfortable retirement.

What I would say is that additional pension might mean you can work part time on the run up to state pension age. DH & I plan to take our main pensions at 60. These will pay our bills and live a comfortable lifestyle, eat out and have European holidays, but won't necessarily fund the long haul trips we hope to do. If we work part time we will be able to afford those holidays and add to our savings before we are eligible for our state pensions. I realise these plans depend on our health, but knowing we won't have to work full time and would actually be ok if we stopped working sooner is reassuring.

A lot of the 'how much do you need' articles are written or commissioned by pension companies (pension bee is the affiliate link for the one OP has linked). Pension companies aren't doing this for the benefit of their clients; it's for the benefit of their shareholders - more contributions means more fees charged means more profit.

That said, too many people are not saving enough for retirement so these articles aren't bad as such but how much you need is just very personal. You have to look at your living situation (rent/mortgage single/relationship) and what you would like to do in retirement and then you'll have an idea of what you need to save. I'm a little surprised at the vitriol the £80k person is getting as it seems to me that they know what they want in retirement and are doing what they need to do to achieve it - that's a good thing! If you want to do a lot of travelling, theatre, days out, hobbies, eating out, club membership then you need to save a lot of money.

Mine and my DPs pension won't be anywhere near as high as £80k (less than half) and I'd rather do longhaul before I'm 60 (I already find flying irksome and I'm only in my early 40s). I don't know anyone in their 70s flying long haul, they are either too unwell, travel insurance is too expensive due to health conditions or just can't be arsed. I do want to travel but would like to explore the UK and Ireland, maybe a European city break but otherwise I'd be happy in an all inclusive in Costa del sol for a week which outside of school holidays isn't currently that prohibitive (plus I am happy to slum it in a 3*). I don't want to be busy in retirement, I'd like things to do but as long as I have something to look forward to I'm happy pottering around but that won't suit other people.

We should get around 80% of our current income.
We probably wouldn’t need to retire 100% that early though as our work isn’t hard labour type, so likely just drop down gradually to less hours and carry on working part time into our 70s

Exactly. Supporting with uni living expenses absolutely, it currently costs me about £8-10k per year per child on top of their loans and not paying fees. But to stump up for the fees when you’re planning retirement doesn’t make sense as per Martin Lewis.

No I used the wrong word! Should have said 'helpers' rather than carers.

Why is it mad to pay them?

Martin Lewis explains this very well on his website. The likelihood is that your kids would never repay the loan fully so it’s pointless.

Sorry, I misunderstood.

Why is it mad to pay them? But there are also costs of accommodation and bills/food. We've done it twice already but there is a big gap between them and the next two, thankfully!

I think I really meant rather than actual 'carers', people to come and do the things that I could no longer do, like a gardener and/or a cleaner/dogwalker.

Other than me, 55, and someone in their 40's, every member of my team at work are retired and do 1-2 days a week. It's a very easy WFH job and the hours are so flexible, they can be done literally anytime. It's also easy to take time off for travel or whatever.

That's really my plan. If I'm well enough to still want holidays and go out a lot, then I'll be well enough to work a couple of days a week to pay for it. I'm in a chronically short staffed area in the public sector and that's not going to change. Certainly not in the next couple of decades!

If for some reason, my health stops me working at any point. Well then I wouldn't be well enough to do anything that costs much money anyway.

I live in SH so I won't have major repair costs. Live in London and don't drive and will get my free oyster card at 60. So my outgoings and need for contingency money will be low. State pension + 12-15 hrs work per week, will give me a comfortable life if I am still active. State pension is sufficient if/when I'm not.

It’s all dependant on what is an acceptable standard of living for people. Someone upthread loves walking and gets to ride a friends horse for free . As that’s what they love doing with their spare time that’s great and it’s cheap. I know someone who has a livery yard and has offered me horse riding for free but I have zero desire to get on a horse, I’m sure some people would be delighted with that offer.

We plan on spending up to 50k per annum. In the first three years of retirement we will be travelling most of the year, just returning for school summer holidays and Christmas. DS and his GF will be living in our house and just covering the utilities and paying the council tax but our home is looked after. We also have friends and relatives in various countries so there will be the odd week here and there of free accommodation. I know my Chinese relatives will insist on paying for everything and it will be a fight to spoil us.

One of my friends who retired recently is buying a yacht whilst another is off in Bali at the moment. I also have three friends who are facing pretty dreadful retirements because they all surprisingly after really long marriages are getting divorced in their fifties. Their retirement plans have been scuppered.

Our plans to retire early were also bought forward due to my ill health, it’s not life threatening but it’s difficult and also the deaths of four friends all before 60. My poor sister was widowed just past 60 and her DH never got to retire at all.

DH and I retired slightly early and have a total DB pension income of around £35k p.a. net of tax, a paid-for house, and no dependants. With the PCLS in reserve for emergency expenses, it allows us to live very comfortably and have a decent amount for travel and recreation. We're used to budgeting within our financial means and it's incredibly liberating not to have to "budget" our time within an annual leave allocation too.

I hope to have around 35k per year, including state pension. I'm lucky that my profession is such that I can just work a day a week if I want and earn a good salary, so I don't think I'll have a Final Cut off where I retire.

I'm 41 and am already mortgage free so no costs there. I earn about 50k per year. I'm saving max into my LiSA that I can take at 60, my workplace pension and a private pension (through my Ltd company). I also have a LA and NHS pension floating about. I don't think we'll be downsizing so won't have that money.

I want to have roughly the same lifestyle I have now, at least until I'm mid 70's then I'll prob not want the same amount of holidays/city breaks or to attend expensive social events.

@Janjk

I hear you.

We're poorer (by quite some margin) although I feel fortunate in that we are homeowners, and have paid off the mortgage.

Also I don't want to do a lot of flying in my retirement, as I feel air travel contributes significantly to global warming. Taking several flights a year would not sit well with my conscience Handy - as I did a lot of travelling when younger,...

Life is about balance. Saving for retirement is incredibly important, but not at the expense of making large sacrifices in your working life. That old adage of spend a bit save a bit applies. The more you can save for retirement the more options that you have e.g. maybe retire early. As to how much you need it really is like saying how long is a piece of string. I am an adviser and I see many many people that have more money than they will ever spend in their lifetime (quite often with no children to pass the wealth on to either) also other people that really struggle on their income and also those on a low income but still have more than enough for their needs. People’s spending habits vary so much. For some £1,200 p.m gives them a lifestyle they are happy with for others £5,000 p.m. what I do.know is that you will almost certainly want more funds in your active early retirement years than in later years (though care requirements clearly erode savings very quickly). My 90 year old mother in law, finds her money from state pension and pension tax credits accumulate in her account as her expenses are limited and she doesn’t do much at 90.
what you can’t predict is your health and how long you’ll live. These factors have a big influence over the funds needed. Just try to save to give yourself options.

This thread is eye opening for me. I was considering taking my pensions at 60 to retire early, perhaps supplementing with part time work until I get my state pension but the amounts being talked about make me wonder if that's feasible. The amounts some people are talking about are staggering. To me anyway, although I've always thought I earned reasonably well. I feel quite depressed now.

This is the basis of the projections you see from pension providers. They try to show you what you need to sustain your current lifestyle. My season ticket for the train is currently 5k so that’s one saving I will have!

To the PP that made the comment about DB pensions - the best schemes have been phased out and I think uniformed services vary massively depending on the kind of uniform. The best existing DB pension scheme is the civil service which contributes 27%. I find that a LOT and with it coming from tax money, a bit outrageous tbh given that police, fire etc schemes have been reduced and they have to contribute more themselves on comparably low incomes.
I fully support public sector DB pensions but think they need and overhaul and we should pay these people properly instead as we currently have uniformed services, teachers and nurses having to rely on food banks.

I work in the private sector and have a small DB scheme from an employer years ago but the rest is DC company schemes and a sipp and have saved reasonably well since a financial advisor told a 25 year old me to get my head out of my @ss. Thanks to this man I have always paid well into my pensions and kept an ISA on direct debit which has saved my skin numerous times with shock life events like redundancies or needing a new roof. Now I can see retirement in the next ten years I’m grateful for the advice. I am trying to teach my kids about this but their dad is a terrible example and spends a fortune on cars and holidays and relies on inheritance to pay his mortgage off.

It's all relative. If you manage on a low income before retirement then there's a good chance you'll be able to retire comfortably on a low income. DH and I earn £160k combined now and I've projected we will want around £60k a year in retirement. We won't have a mortgage, kids at home or school fees.

@Toodleoodleooh I think the op means help children with university living costs which is what most parents end up having to do if your income exceeds a certain level. University halls are now £5k a year!

I've worked out after retirement and prior to 67 we will have about 3200k a month coming in ( but have some lump sum pots also) and on turning 67 we will have about £4500 a month but will plan to divert some of that to our children to help with costs. We've gone off eating out these days as we always feel we cook better food ourselves tbh! Perhaps we will eat out once a month but somewhere much better. Travel - well we have a campervan that will get used well and maybe an annual break in the sun somewhere.

No, the local authority WON'T automatically pay for carers!

There will be a financial assessment involved, and if you have more than £23,250 in savings, then you WON'T qualify and will have to fund carers yourself.

I think the amounts stated for basic, comfortable or luxury lifestyle after retirement are way too high. They are estimated by investment / pension companies who want you to invest more with them, which obviously skews their projections.

I live in a small house I own outright in an expensive area and my income after tax is approximately £17,000 a year. I have around £150k in savings (paying interest of approx £7500 pa which I re-invest but could supplement my monthly income if I wanted) which I could draw on for holidays / car / household repairs / new appliances / clothes or whatever and I manage very well. In fact I feel quite well off.

My income is made up of full state pension, tiny private pension and a widow's pension. If DH hadn't died we as a couple would have had round £32,500 which we thought plenty, along with savings to draw on for holidays etc.

I’m from indonesia and went home every year. The cost of airfares for 2 people are £7k. We flight business. Easily i can spent £20k for 4 weeks holiday. Thats not include shopping. Watch, handbags, etc. They can be so expensive. There are watches and bags that cost £100.000 plus. I dont have it personally but i know people who have that kind of wealth. Surely its all depends on your lifestyle.

Did you read my post where I clearly stated I would struggle to spend £5k a month. Ie your taxed income. Your reading comprehension is also lacking.
And yes I am aware of compound interest which is why dh and I paid into pensions from a very young age. At no point did I say our pension income would be less than yours, rather that we would struggle to spend what you plan to. Instead our children will benefit from our excess income.

I will save in case of need carers in future (although my kids have indicated that they would all chip in for this if necessary).

Don’t bother saving for carers. If you need them the local authority will pay for them. Nobody on such a low income is expected to foot the bill themselves.