Help in cutting monthly outgoings

[PensionPotPreparation]

Hoping for some help. I preface all this by saying that I know we have been in a very lucky position owing to DH's high paid job, to the extent that I haven't really had to budget. I know that sounds so entitled. Sorry.

But now we are about to start drawing down from our pension funds, and I have been preparing a schedule of regular outgoings and when they are paid so we can set up a standing arrangement of payments into our bank account from our pension pot and investments.

And I confess that seeing monthly payments written down and annualising them is an eye opener. And to my embarrassment I don't really know if the amounts are reasonable for our lifestyle or whether there are clear flags that we could shop around to reduce payments and fees/ or change what we pay for /do

Again, I am aware that this may come across as stealth boasting, it is not intended that way...I am hoping that some of you may be able to point out that certain standard bills etc are much higher than they should be/ you would expect.

So for example we pay
£300 per month for gas/ electricity - £3600 pa
£174 Council tax per month - £2088 pa
£90 Virgin Media per month - £1080 pa
£47 BT broadband per month - £564 pa
£80 Water rates per month - £960 pa
£470 House insurance per month - £5640pa
£600 Cleaner per month - £7200 pa
£250 gardener per month - £4000 pa

Annual fees
AA membership £272
Car insurance ( 2 cars) 537.76
Car service (1 car) 450.00
Travel insurance 523.70

Do any of those scream out as being unusually high. Together they come to just under £27000 pa.
Food costs/ eating out/ theatre/ gym membership/ magazine and club subscriptions / holidays etc I can see more readily where cuts can (have to) be made.

Thanks

House insurance looks like an annual amount not monthly.

Water seems high. Is the gardener using a lot?

Certain bank accounts will provide travel insurance, AA (or similar) membership and other benefits. But the insurance may not cover pre-existing conditions if you require it, so check.

For anything you automatically renew, check new customer rates as companies are notorious for overcharging loyal customers and giving (often substantially) lower rates to new customers or those who challenge renewal rates. Insurance, broadband, memberships, etc. This could explain the very high house insurance.

Some items are lifestyle choices - cleaner, gardener, gas (can cut back on heating), same as the theatre, eating out, etc. you are reviewing. Decide where you can cut back and not really miss, and what are must haves for you. Of course, the amount of your pension and investments are very relevant - don't feel the need to cut back just because you are retired, only if your current lifestyle will become unaffordable.

@DSGR

I have a cleaner at £60 a week for four hours. What’s yours doing for £150 a week? Unless your house is absolutely enormous that seems high. House insurance is ridiculous unless you have priceless paintings

I would like to know this too! My cleaner is £25 a week. House insurance seems very high as others have said.

Thank you all for comments so far.

Virgin/Broadband - good point. The guy who came to correct a fault in our Virgin Tivo boxes last week did say that our subscription was high. We've always had BT broadband and are told Virgin not very fast but that is probably out of date info, and maybe the key to getting a renegotiated package is to go for a bundle as you all suggest.

House insurance - no that is right - buildings and contents insurance. 6 bed house, London. In fact we got it reduced to this (!) a few years ago when we finally moved insurers from a firm that kept on increasing the premium hugely each year. I think the problem arose because a few years after we moved in, and before we decorated the hall and landings my husband wanted an apparently worsening crack in the hall to be checked over. We mentioned to our then insurers and they commenced a "suspected subsidence" investigation. So for a year we had the crack measured by surveyors; their conclusion was no evidence of subsidence, the insurers paid for redecoration but the subsidence issue has lived on. The issue is that one of the standard questions asked is 'have you ever been inspected for subsidence" and an affirmative ( irrespective of the cleared result) seems to rule you out immediately from most of the usual home insurers. We eventually found our current firm , because several of our neighbours used them. I need to ask our neighbours what they pay and given that the investigation was over 22 years ago, with no cracks appearing since, maybe I should try again... Insurance company do think we must have lots of original art and jewellery though (which we don't) which are "automatically included" so need to look at that again too. I am sure they would throw in travel insurance too, which I've not taken up.

Car insurance and travel insurance are actually still multi car/ family policies. Daughter actually pays us back now for her share of the car insurance (and pays the service costs for the car to explain why only one car specified in my list). There are some pre existing conditions included.

Cleaner - well she has been with us for over 25 years. When I was ill about 17 to 10 years years ago she stepped up, gave up other work, to come in every day after school to look after my kids (on top of usual cleaning and ironing on 3 mornings a week). Pay obviously went up significantly to reflect that help and although we then reduced her hours back down as I got better/ children became teenagers, it stayed high per hour for the cleaning ( loyalty and gratitude I suppose) She currently comes 3 times a week for around 12 hours a week ( cleaning, bed changing, household ( ie bedding towels etc) laundry, ironing). will reduce that.

gardener - twice a month in summer, once a month through winter. Overall annual cost rounded up to include plant purchases/ and some relandscaping/putting up trellis/ plus tree surgery work every two or three years . Their rate is £25 per hour per person.

Thank you. Lots to think about.

We’re a 4-bed in zone 2 London so that insurance in all honesty seems ridiculous

Another thought which you may not be ready for is if your running costs are so high should you downsize …

Shop around for all insurances

Same with broad band and car rescue services. Plenty of smaller organisations that do the same job as the AA for a lot less

You could probably reduce your water and utilities bill with some compromising if you wanted too

I was going to suggest downsizing - those costs are crazy.
You definitely don't need the cleaner or gardener as much (if at all).

You need to explain the house insurance was over 22 years ago - don’t the questions say ‘in the last 5 years’ or something?

You're being well and truly fleeced by your home insurance. We had similar issues (4 bed semi in London: cracks in a few rooms, monitored for a year or two, drain inspection, soil samples to check for tree roots, neighbour's tree removed, redecoration - less then 20 years ago). Our insurance is less than £400 a year. We stayed with the same insurer though (LV). Or maybe they forgot to increase our premiums...

Your water is high too, if you're in London. We're on a meter and pay £20 per month (2 people, low usage, rarely use mains water for the garden).

Downsizing could be considered as others have suggested, given you have a 6-bed house and are retiring. It would also reduce the maintenance costs, which aren't listed as they are periodic not regular payments. It can be a big step if you love your house and local community, but as with cleaning and gardening, maintaining a large house is expensive and a hassle as you get older.

Are you on a water meter?

If your cleaner is actually doing 12 hours a week and you're paying her £600 a month, then actually that's only £12 an hour (roughly)

Another thing with downsizing - it releases equity so you don't have to cut back on lifestyle - eating out, theatre, gym, holidays, etc. - but can live to a high standard. Or give it to your children, set up trusts for the grand kids or whatever. Might be worth thinking about inheritance tax planning.

How are you paying so much in water rates?

another thought wrt downsizing - can you split the property and rent the other half out?

If you are paying £600pm for a cleaner and £250 for a gardener, then presumably you live in a reasonably large house/ garden. Is this sustainable long term for 2 people? Bearing in mind that as time goes on your ability to care for the property will decrease, requiring more assistance and your time in the property will increase, and you will likely being less tolerant of cold, therefore increasing utility costs. Also you presumably like to travel so you will be leaving a house with high overhead costs for long periods. So I'm going to be radical here and say you should consider downsizing now whilst you are fit and well and it is not to arduous a task.

Some of these are unavoidable but from a glance...

Why are you paying for virgin and by, get a combined package either through virgin or I use sky for everything, around £75 without sports including line and broadband.

That's high for gas and electric, can you economise, turn down a degree and/or an hour or two less a day?

Check that's the best you can get for insurance, use a site like compare the market

That's very expensive for cleaning, I paid £15 an hour - 3 hours per week for a large 5 bed. I pay £50 a fortnight for gardening (1/4 acre)

Car servicing seems high but it's brand dependent

Annual travel is very high but if you have preexisting conditions it can be, try staysure. we get cover through the bank for £12 a month and we both have preexisting conditions, this includes world wide and cruise.

Annual travel is very high but if you have pre-existing conditions it can be, try Staysure. we get cover through the bank for £12 a month and we both have pre-existing conditions, this includes world wide and cruise.

Would be interested to know which bank provides travel insurance including pre-existing conditions?

Gas and electric seems very high to me even in todays climate .
And yes house insurance unless it's listed or something ?

I don't understand your house insurance or cleaner/garderner costs. We live in SE in a very large detached house and pay £200/month for cleaning and £90/month gardening and about £500 insurance per year. If you are retiring do you still need a cleaner and gardener?

£300 per month for gas/ electricity - £3600 pa This isn't huge if you have a larger than average house, and you need to prepare yourself for this to increase significantly, depending on when this payment relates to (if you are coming to the end of a fix set nearly a year ago, you need to factor in a price increase of more than double by April). Also you could use more if you're at home more. Probably worth investigating if it's worth investing in energy efficiency measures.

£174 Council tax per month - £2088 pa - average and not a lot you can do about without moving house. Which is something that you may wish to consider as a 6 bedroom house in London has to be worth a lot of money, that you could release a lot of by moving somewhere smaller in a cheaper area, which would allow you to keep up your lifestyle, travel, help DC out, whatever your priorities are. Although council tax won't necessarily reduce if you do this, because it's lower than average in a lot of places in London.

£90 Virgin Media per month - £1080 pa. Huge amount. Do you actually watch all the channels? You could get Netflix, Now TV Entertainment and/or movies for a tiny fraction of this amount. Or if you are determined to stay with Virgin, ring them and say you want to cancel because it's poor value for money and they will offer you a deal that is significantly cheaper, especially if you agree to take up their broadband (see below)

£47 BT broadband per month - £564 pa Quite high. We have fast fibre broadband from Virgin Media and it's fast enough for gaming, streaming etc. You can get this for £20-30 a month by starting on a deal and then swapping and changing or simply phoning at the end of each 18 month contract and asking for a deal to stay. I've done this twice, and they've immediately said yes both times.

£80 Water rates per month - £960 pa. Quite a lot, I'm guessing you're on rates. Moneysaving Expert's rule of thumb is that you'll pay less on a meter if you have fewer people than bedrooms. You're currently paying for the water use for a large family that no longer live in the property.

£470 House insurance per month - £5640pa. Previously discussed at length and only thing I can suggest is put some effort in here, talk to a broker, and read all questions you answer carefully so you're not admitting to problems that you don't need to because they don't exist and were a long time ago anyway.

£600 Cleaner per month - £7200 pa
£250 gardener per month - £4000 pa

Definitely worth cutting back if you no longer need their services, eg if you have more time to do the work yourselves. I'm sure they'll be able to replace the lost business easily enough, these types of services are often in high demand, they may even have waiting lists and you'll be able to provide them good references.

Annual fees
AA membership £272 Very expensive. Look at Autoaid, same service for £60 a year, otherwise, your car costs look OK.

Travel insurance 523.70 This is expensive but I don't know the impact of pre-existing conditions or if it covers worldwide travel and/or winter sports. Might not be able to reduce significantly.

I'm sure you might be able to identify other costs to cut. Have a look at the Moneysaving Expert money makeover to see if there's anything else you haven't thought of. It's not just for people in debt.

www.moneysavingexpert.com/family/money-help/

The snoop app is great for this, it analyses your spending and sends you links for better deals. Highly recommended - seeing how much I've spent at certain retailers over the past 12 months was certainly eye opening!

@eightlivesdown

Annual travel is very high but if you have pre-existing conditions it can be, try Staysure. we get cover through the bank for £12 a month and we both have pre-existing conditions, this includes world wide and cruise.

Would be interested to know which bank provides travel insurance including pre-existing conditions?

NatWest does We have a free policy through bank account with pre existing added in at no cost

I mean given your yearly outgoings are pretty much the average yearly income then yes they are very high. As in half the country earn less before tax than you spend on a selection of your outgoings

I have the fastest Vodafone broadband package and it costs me £21 per month so that is definitely high. What are you actually getting for the virgin media package if its doesn't include Internet, tv ilicense, netflix etc???

However most of your bills I assume are inextricabky linked to living in a big/expensive house. You could reduce all of them hugely if you downsized but its whether you want to do that.

Where are your phone costs? Is that virgin media?