Can i live comfortably on this amount?

[Hopthegoodgod]

I am due to retire at end of year. Private pension is going to be £25k per annum and will get full state pension on top of this. I live in rural south east in older property with no mortgage. No loans atm . My brother thinks I will struggle financially as my children are overseas so will need a higher income to regularly visit / host their families. He suggests I have two options : carry on working part- time ( don't want to as I 'm a full time teacher and exhausted). .Alternatively, sell up and downsize.
Am I being naive to think I can live off this amount comfortably ?

Blimey, can’t get over £500 month council tax! I’d downsize i think or move to a cheaper area. Seems enough to live comfortably off but not luxuriously.

Op I know a lot of people who make a good supplementary income doing private tutoring, coaching for entrance exams, even just helping with homework once a week. I know you don’t want to work pt but surely there is a middle way between retiring completely and having one or two private pupils?

Also, I would not rely entirely on what pp said about people spending more in the early part of retirement as that depends on health issues. My pil ended up spending a lot on carers latterly.

Try living on it for a period of say six months putting the surplus into emergency funds - if you’re finding it quite comfortable then go for it

Another whose shocked at the council tax which is more than double mine............but putting that aside I manage fine on state pension plus about £5k net of NHS pension so I'm sure you'll be fine!!

From the figures you will have approx £350 less per month compared to your current income.

definitely look at that council tax!

I would also maybe consider the part time work suggested, tutoring/marking papers, even maybe teaching some English online etc. do this for say 1/2years to earn the £350 difference but put it in a savings pot, there if you need it, but not to be used as part of your monthly income.

You will then find if you can live off the amount or not. If you can you will have a nice pot of money to spend on flights.

If you want to plan more holidays/social things then your outgoings could effectively raise so it will need some real budgeting consideration.

downsizing is probably not a thing to do unless you have to considering your area as a smaller house will still be pretty expensive and you will have to compete against FTB’s in the market

Agree £500/month council tax is mind boggling! I live in a £1.25m house (London three bed terrace) and mine is about £225/month.

Parts of London have the lowest council tax bills in the country. The difference between the lowest in the country (Wandsworth) and the highest (Dorset) is 2.6x.

Others have covered that you need to identify all outgoings and compare to income. Unless I've missed it you don't say when your state pension is due? If you are needing to bridge a gap you need to allow for that.

I'm a retired teacher (I'm 57) and have a pension of £19k, which is just over £1400 a month. I also have a rental income of £5k a year. I got a reasonable lump sum which is invested.

I have no mortgage or debts and will qualify for full state pension. My immediate outgoings are £700 a month inc food but doesn't include extras like insurances, car costs etc. Cheap area in North Staffs. My two children are working and not dependent on me.

I do some supply which can range from £400-800 per month depending on what's going on. I've got a SIPP which I'm adding to every month and hoping to use this when I'm 60 to bridge the gap to the state pension.

I manage perfectly well on this. I save money every month, eat out, weekends away and have just come back from a two week holiday.

I've been surprised how my money has stretched. My first year of (semi) retirement has been brilliant- best thing I've done.

Your post tax income will be about £2,540 per month. So ~450 per month less than now.

Do you save money now or do you spend it all? I’d have a look through a years worth of bank statements and work out how much you spend and what you spend it on before making any decisions. Do you have any savings for unexpected repairs, replacing your car, etc?

Anything over 40% tax bracket whack it in your pension asap.

I was going to say it sounds fine, I earn about that and live alone in London (without mortgage), until I heard your council tax figure. That puts quite a dent in things. I think I’d see how it goes for a year or two and then downsize if you find you’re not managing on the pension.

Yes, I will have a small amount of savings
(20K). I will possibly get inheritance from mother ( if she dosn't ever go into a home). However I try not to factor that ( 200k) in as she is 85 and in good health. Council tax is very high here in Sussex but cannot do much about that whilst i live here as i have tried to get rebanded but failed. I will also get 12500 state pension .

It's more than I paid in rent when I last lived in the UK!

@Hopthegoodgodyes don’t think you can really count on that money. At fees of £1400 a week which one home near to me is £200k does not last that long!

Not many people actually go into care homes. In 2021 only 10% of over 85 year olds were in care homes. It's actually dropped as in 2011 it was 13%. People seem to think that everyone ends up in a care home but it's not true.

Although I agree not many go into care homes, if you are one of the ones who do it is very expensive.

My Mum has been in one for two years. She needs 24/7 care. She is likely to run out of money despite starting with £500,000 at the point she went into care including her flat. Being able to self fund means she is getting really good care. If you are dependent on others, having the funds to choose your care home is really important.

To the @Hopthegoodgod I do think that is a very good pension and you will easily be able to live on that.

WE yes both of us live on £2700 per month and can afford to go away twice a year.

So nearly £40k pa? You'll be fine, believe me.

We have recently retired (8 months ago) and have £3300 per month between the two of us.
Dropping from £5500 per month. Honestly, other than we aren't saving as much, our lifestyle hasn't changed much at all. Our council tax is also high like yours.
We just don't seem to spend as much at all in retirement. We have had one luxury holiday so far and are going on monthly mini breaks.
Don't feel the need to buy ready meals now or go out to eat because we are too knackered to cook after work.

@Hopthegoodgod For day to day living your pension with state pension is definitely sufficient. You should also have room to save for holidays etc.

However, if you are able I would look at exam invigilation and/or tutoring to build up your savings. You will appreciate the cushion later on.

I reckon you'll be fine, but really what you need to do is work out what you currently spend and how that could change in retirement.

I plan on retiring next year at age 58. I need to learn how to do spreadsheets, I think, but for my meeting with a financial planner a few weeks ago, I worked out my spending over the past year, including annual subscriptions and costs as well as holidays, gifts to family and friends, lunches with friends, savings etc. That has helped me see where I'll make savings on retirement - and think about what I might spend that I don't currently.

For the past 3 months, the second thing I do every morning, after making coffee, is look at my banking app and write down - in a book as I'm very pen and paper oriented! - what I've spent the previous day, and what it was on. Actually, this process has made me very aware of how much money I've been wasting on nonsense - so I'm saving more now and will start paying more into my DC pension for the last few months of employment.

I'm single, and will be downsizing to a one-bed flat - no mortgage, lower council tax and lower energy costs. It's in a small coastal town where I can keep busy with free and low cost activities. It's important also to think ahead to how you'll spend your time, and how much that might cost.

For visiting family abroad - you might like to look at home exchange as an option as that will save hugely on accommodation costs. House/pet sitting abroad is also an option.