how much do you think you will need to retire on?

[SingSam]

I am spending the last few days before going back to work looking at how much I think I will need when I retire.

I have read all the advice about how much you are likely to need (a lot say 2/3 of current income which for me is not going to happen), some say work out what your bills are likely to be and go from there...

I am in London so I assume for now I will stay where I am and potentially be mortgage free (v small property). There is the potential to sell up and buy somewhere cheaper but I don't want to consider that option yet (without doing some more research).

I just make a spreadsheet of what my bills are likely to be - excluding food, excluding mortgage - and I was quite surprised by how high they are. This would be assuming I stay in London. I am also sure some bills might go up (like electricity) as I'm in the house all day but then I assume my travel costs would go down (not commuting to work, getting a bus pass eventually!).

has anyone else done this sort of exercise and thought what sort of monthly amount they are likely to need when they retire?

popcorn
Weirdly the thing that concerns me the most is the huge public sector pension deficit. Where is the money going to come from?
That depends.

The funded schemes have their investments and strategies and are working on it.

The unfunded schemes are as they say - unfunded. Pensions are paid out of later years taxation.

So the money will either come out of taxes in years to come

or out of taxes in years to come through employer contributions.

TalkinPeace

I think I read that liabilities were equivalent to 80% of GDP which seems insane.

The very fact that you live in your own house in London gives you a huge pension pot.
There are many lovely places in the UK where you can buy a decent house near to amenities for a tiny fraction of London prices.

I recently checked my pension again. I'm 59 so until recently was expecting to get pension at 60. I find that I was contracted out for most of my working life so 40+ years of conts and I still won't get the full pension. There is time still to top up, I can choose to pay class 3 conts for the years from 2016 to 05/04/2023.

I will never buy an annuity

You can buy limited term annuities with a guaranteed value at the end. Without divulging too much I've taken one out to partially see me through until I'm 67 - I know I'll still have a lump-sum at the end and it will give an income that will allow me to go part-time.

Before people think I'm 'lucky', this is all because of the death of my DP in 2015, I'd gladly give it all back for a week together.

This thread does show that pensions are still as clear as mud for most of us!

popcorn
I think I read that liabilities were equivalent to 80% of GDP which seems insane.
I cannot see how
Public sector pensions are rather a specialism so I have lots of the data about them on my computer.
The net present value of all future liabilities might be that high, but as that liability cannot by definition crystallise, its irrelevant.

Ok talkin. I think Im just anxious that we are going to have a shit time in the UK over the next decade or so.

I think Im just anxious that we are going to have a shit time in the UK over the next decade or so.
Oh we are.

Unless the UK stays in the Single market
or massively increases the number of non EU visas (and reduces their offensive cost)
there is going to be a significant crunch in the number of people paying into the tax system
versus the number of people drawing out

The whole world except Africa now has a birth rate deficit that will start to really kick in by the mid 2030's

Cynically, its one of the reasons the Tories are underfunding the NHS and social care - make the poor ill people die younger and then the future liabilities drop.

significant crunch in the number of people paying into the tax system
versus the number of people drawing out

Yep & the squeeze on those tax payers re housing, living etc is increasing but the government are going to have to raise taxes. 🙁

Two of us are early retired - we own our house and manage fine on £9000 per year.

Squeegle ( fab name )
Some employers do employ older people - they value experience . In my workplace there is someone aged 80 and two in their 70s - the only other person in that team is in her 20 s .

Rizlet, wow would love to know how you do it on £9000

Blue hoody
Sorry to hear about yr dh ill health . 25 k pa on benefits seems good and more than manys work pension ( allowing for extra needs ) it's reassuring that you have that support as I had been reading about how dire the benefits system is - so thankfully it is not all doom and gloom .

fruitcider
He basically needs to save about £1000 a month

Well he takes home £1328 a month so no chance of that!

ginorwine (thank you)
Well I hope things change, there is obviously much to value in experience, in marketing though youth is definitely valued and so I do wonder what I will be doing when I’m over 60, I will feel a bit of an oldie I think. I’m not sure what I can do next, I’m not really a self promoter/ teacher type so I won’t be going into consultancy or teaching.

Our minimum spend would be £11000 a year. That's bills, heating, food and running one car. Nothing else. That's one pension.
Clothes, holidays, gym and going out etc is the second pension.
Savings will pay for anything else. If either of us dies the other gets 90% of the pension.

Squeegle
I am ex a particular profession and I don't want to teach / lecture / advocate . The work I do seems to attract semi retired professionals . Don't want out myself - but you are welcome to pm . It's minimum wage tho .

Thanks, Ifailed - I see something very similar to you on the pensions website.

Lulu If he is HM Forces, then go to the Forces Pension Calculator, which will tell you what he will get according to whichever scheme he is on.

I went through this exercise recently by going through my monthly bills spreadsheet (yeah I know it's not everyone's thing) in detail and adjusting the figures as if we were retired, line by line.

E.g.) added 20% to the monthly electricity due to being at home more, removed the lines for commuting, children's activities, etc.

It all looked ok until I saw that it still added up to almost £26k

My plan is to save any further pay rises or bonuses. It's all got to help.

Lulu, if he is in HM Forces he can also request a pension forecast via his JPA account. If he is not sure how to do that, staff in his unit pay office can help, or he can google Veterans UK and get advice from their website. Service personnel can submit a request for a free forecast every 12 months; it is linked to the individual’s specific service career length and pension details so is very accurate. If he requests a further forecast within 12 months of his last one, he will have to pay a fee for that.

Sorry I'm a bit late to this thread. DH and I are 63 and 62 this year so pensions and what we need to live on is a topic close to our hearts.
Once we get through to state pension age - 66 for us - we should be fine. I have some SSP/Serps as I have never been contracted out that means I get £10k state pension but of course you can't access that until 66. DH has always been public sector and his pension is quite generous, my poor little pot which I have put together all on my own with no employer support will be doing well if it generates £5k a year.

It is interesting to hear how little some of you can live well on, I suppose lots of pleasurable activities don't cost much, especially if they are existing pastimes and you have all the kit.

Many of our friends who are a bit older than us are retired and some of them have had very part time work they have really enjoyed - a nurse who does the odd day of agency work here and there, someone else has done meet and greet at M&S for Christmas. Another friend has delivered top of the range cars for a Mercedes dealer, and explained to the purchasers how all the whistles and bells work. I have a few ideas for buying and selling stuff that I'm already trialling and might have a craft stall too. It is still a bit scary though.

One big issue for us is whether to move and if so where to. We feel our existing 4 bed relatively new build is too big for us and would like to live somewhere we can walk and cycle to the gym and shops etc. but when we look at smaller houses they just feel too small. We might have to enlist Kirsty and Phil to help us.

Following this thread with interest , it spurned me on to lookup my state pension forecast . I will in 12 years have enough contributions and forecast £156? A week. My cope (nhs) is atm £11.45 pw.
I'm 40 . I'm 10 years I wanted to give it all up, sell the house here, mortgage. free in 5 years and go and live in my house in a field in Bulgaria . I'm now confused like the rest of us and pondering if it will be doable ? 🤷🏻‍♀️

I think that without a mortgage or rent to pay a single person could live OK on £1-1.5k per month. And a couple could live on around £2k-2.5k per month. But that wouldn't cover things like good holidays and expensive repairs to a house.

Gosh, Vivannemary that's a bit depressing. I fall into that bracket now while I am working. The thought that I won't be able to afford to repair my house is a sobering one.