Is £23k really only a modest retirement income for a single homeowner?

[Lumpycat]

I’m at that stage where I’m constantly doing my sums and wondering when I’ll feel secure enough to retire.
I am a single 60 year old.
I’ve seen the standard responses on this based on some massive survey where it’s state pension levels to just survive. Then about £23k to have a moderate lifestyle and about £32k for a decent retirement.
Own own house.
Would have around £80k put aside for big things/kid’s weddings help.
Live in Surrey/outer London.
Drive a hatchback that I buy at about 2 years old and trade in at about 10.
Three adult children. One cat!
Hobbies very cheap. Reading, cooking, gardening, music, walking, local gym.
Not a shopper and don’t do beauty treatments.
I think I would spend about £5k a year on car including replacing it. Then about £2k on a holiday. Then bills and food around £750 a month so that’s about £15k.
House is fairly modern so not thinking it will need anything major for a decade.
I’m not massively sociable. Have close friends that I tend to meet for coffees/pub quiz/walks.
I don’t get why £23k gives only a very modest lifestyle. Seems like it will be plenty.
Current planning would give me £21k if I retired today then state pension on top at 67.
Really interested to hear from anyone who retired already on similar amounts and the reality of living on ‘below modest income’ levels at my age. What am I missing?

2k a month with no mortgage?

Easy. I wish I was going to have that much

Do you know, it's all a matter of expectations? I would, in an ideal world, quite happily live out however many years I have left reading books, watching films, and listening to music. We have access to all of human creativity, at the press of a button! (I do understand that doesn't appeal to everyone.)

Yes its a good point isnt it, posters on this forum are aghast at someone having to rough it on 23k but equally are against pensioners having any protection on their measily 12k a year

To answer questions.
Really not sure what I’d do all day! Some voluntary work probably. Plus a lot of reading. As PP said there is a world of free entertainment out there. London is easy to get to (although am just outside the free travel area). There are a thousand cheap things to do in London.
I would visit family and friends.!If I get grandchildren I’d help with them.

Re health. I do what I can and have been remarkably lucky so far. I do weights and cardio several times a week although job is sedentary.
In fact I’d probably pop to gym every morning. It’s a five minute walk away. Would be great to not rush it and set myself some new goals.

Nothing I most enjoy doing costs all that much.

I'm not sure anyone is aghast - the OP is asking for advice about choosing to retire at 60. She's used to earning 64k and having very little free time, so people are pointing out that a lot more free time and 1/3 of the income might not be better.
This is true especially as she says her job is currently boring but not stressful. Much like a pottering retirement.

One thing to bear in mind is that the percentage of take-home pay is very different to the percentage of gross salary. Once retired, one isn't paying NI or pension contributions, so the headline figures can be very misleading.

I think a lot depends on your health. I see PIL paying for things they used to be able to do themselves for nothing...cleaning gutters, gardening, cleaning the house, windows etc. And a lot more travel to hospital appointments...some is free travel but if they drive, there's a cost. Need the heating on more as less active and home more etc etc.

They are only late 60s but maybe didn't prioritise their health.

Current planning would give me £21k if I retired today then state pension on top at 67.

£21k plus £12.5k pension at 67 gives you £33.5.k at retirement age, and a moderate lifestyle which you describe to a tee.

You've just closed your own argument!

The amount you will get when you get the state pension sounds absolutely fine. I would probably look into job share with your current job and maybe do 2 days a week for now and see how it goes, you might find you enjoy your job more if only there for 2 days a week

Many people who retire underestimate how much of their identity, and sometimes their social life, is tied up with their job. It takes time to adjust. If they've always been healthy they fail to consider what will happen when they are no longer healthy. 67% of people aged over 74 have multimorbidity which means they live with two or more long-term health conditions - OP will hopefully be fine for 10 years but really is not thinking about the later stages of the 27 years she is likely to live.

The NHS is no longer what is was. A friend has had 2 hip replacements but just getting on a waiting list can now be difficult. 80k doesnt go far if you want to fund one or two hip replacements and cataract operation(s). Of course you can live in pain and half blind if you wish.

Nobody made them not plan for their retirement…

I think you will be fine OP, but I would carry on part time for now if you can make that happen at work. Two years to increase your pension by more than 10% is definitely worth it imo.

Also, £200 a month on food isn't very much. I can easily spend £100 a week for one, I wouldn't enjoy what I could eat on £50 a week - if that includes household products you will really be scrimping. I eat a lot of fish - a piece of smoked haddock is a fiver these days.

I also wouldn't want to give up my cleaner and other help I buy in, but I guess that is why we can only offer our own views, we are all different.

Healthcare wise - look at Beneden, low cost health plans that step in when waiting lists are too long for defined illnesses.

No advice as such OP, but you sound a very grounded and also interesting person, perfectly capable of living a full and multi-faceted retirement on modest means. With all due respect to them, some people spend lots of money to filll time because they haven't the imagjnation or breadth of interests to do otherwise. Think multiple holidays, shopping, eating out all the time, etc. That is clearly not you. You've also shown a willingness to adapt - e.g. take in lodgers - so with that positive attitude, you'll be fine. Health - well none of us know what might happen there and while we shouldn't leave ourselves vulnerable, it would also seem daft to sacrifice too much of our healthy years doing something we find increasingly hard on the off chance we might need X operation in 25 years time. It's a balance isn't it?

Modest isn’t bad though it is?
tight would be bad
modest sounds like “quite fine for a person who is well grounded “ ( and without rent to pay )

No need for that at all, people have neither equal capabilities or opportunities in life.

There by the grace of god and all that.

Thanks all. Re the part time thing. Yes, no brainer when the CS would allow me to take part of my pension and work fewer hours for the same money.
However that relies on my manager being willing to reshape my role to a part time one and it really doesn’t work. It is a full time role. I respect that.
Moving roles would also probably mean a move to a central London location and the travel costs and commute would negate any benefits. I am keeping an eye on alternative roles that would work. Should be able to find something in next couple of years But for now it’s all or nothing.
I appreciate the reminders re health. It’s the most important thing in the world. I do struggle to imagine being old and sick as I’ve always been so lucky with my health. I do resent sitting for 8 hours a day when I could be exercising. So maybe health is a reason to retire now even if I’ll be poorer for it.
Anyway the mix of responses indicates there is no obvious answer. Some of you think I’ll be absolutely fine on current finances and some think I’ll be broke and miserable and sick and abused!

You're doing exactly the right thing working it through. From everything you have said, it sounds like you might be there.
(I retired early btw and am not bored, but I am not a bored kind of person.)
I found a book called How Much Is Enough useful. The key though with any modelling is to understand your actual outgoings. Most people underestimate them because they look only at their fixed commitments (DD/SO) and don't account for all the little day to day spending. If I were you, I would start tracking all your actual expenses and perhaps try living on your 'new' budget for a short period.

You pension seems low given you current salary. How many years have you worked in the civil service? Do you have any other pensions from previous employment?

It's absolutely what I'd expect, having a similar salary in a public-sector scheme. More recent versions of the schemes have higher pensions, but lower (or no) lump sums. There will probably be some actuarial reduction involved. Remember, it's index-linked, and for life.

I’m 64. My property insurance and council tax costs close to £4k a year. Bills another £3k. Car insurance and running it/service/MOT another £1500. That’s before I’ve started living! Food, socialising, travel, books, yarn (I crochet), tv subscriptions, phone , pet insurance, birthday/Christmas gifts to my children and family …I think I must go through £35k/year easily (I also have a uni aged child who is dependent on me). So I’ll get full state pension and I only have a very modest private one so I’ll be heavily relying on passive income (I’m a landlord).
I think the unknown factor is your health. If you needed to go into care for example, which hopefully would be a ways down the line if ever!

Oh dear god @anyolddinosaur will you give it a rest with your catastrophising!

The sorts of costs I think you may not have factored in fully -

Extra services you may need as you get older - handyman, gardener, cleaner, taxis, rubbish disposal, that sort of thing

Extra health costs - e.g. expensive dental work (implants etc), physiotherapy, massages, private dermatology or other treatments - these may not be strictly necessary but will enhance your quality of life

Spending more on entertainment/hobbies because you have more time - even non flashy things like leisure club membership costs money

I had assumed OP was on classic, therefore most would be on classic. I would expect her pension to be around £30k unless OP is sacrificing a lot for a bigger lump sum?

but she might not have 40 years service, have PT service for part

I'm always sceptical of these 'average retirement' amounts needed as the surveys are almost always carried out by pension funds/advice services, who, surprise surprise, have a vested interest in ensuring people save large amounts in their pensions.

It doesn't make any sense to me. How can a couple (I know you are thinking about a single person but the same point applied) "need" £43,100 for a moderate retirement and £59,000 for a comfortable one, when the average UK household income is only about £36,000? If most people are managing to live a decent enough lifestyle, afford holidays, etc while still paying off their mortgage, commuting, and supporting kids, why would they suddenly need significantly more than that when they are likely to no longer have those huge financial commitments?

Personally the amount they quote for a 'minimum' lifestyle is still more (including my mortgage!) than I spend now as a 30-something working full time, and I don't consider myself to live particularly frugally - have at least 1 abroad holiday and several uk trips, eat out fairly frequently, have a 2 year old car, buy clothes and make up as needed without worrying about it....