Pension stuff, how's it all looking ? HAve you prepared ?

[JackyJoll]

Yeah the allowances can be arcane. My bro retired and his employers wanted him to go back on a casual basis from time to time. He did for a little while then decided the only people (apart from the employer) that were benefiting were HMRC. After tax it made his daily rate rather .

I’ve heard of guys getting by on a pension, then taking on a small job to pass the time, then finding most of the wage from the small job is taxed at “Higher Rate,” especially in Scotland.

[Mr. Dazzle]

based on this myth that we're all living longer.

It's a double (maybe even triple!) whammy.

Life expectancy is going up, birth rates are coming down. So not only are people living longer (I.e. there are more retired people) there are a fewer young people to replace them as tax payers. Triple whammy cause the aging population needs more and more expensive medical care.

There are two obvious solutions: Raise retirement age. Or, my personal favourite as I've said many times, mandatory televised death matches for the over 60s

With any luck ChatGPT will save us.

Figure 1_ Total Fertility Rate (TFR) increased slightly in 2021.png (24.58 KiB) Viewed 540 times

HPfE2018_Ch1_Fig4.jpg (49.68 KiB) Viewed 540 times

[Dodgy69]

I tend to believe that there's just more old people than there has been in the passed. Have a walk around a cemetery and look at the headstones, I have.

Delaying folk getting there own workplace pensions is just scandalous. I do think taxpayer's money could be spent a lot smarter and undoing the call for us all to work longer.

[Mr. Dazzle]

Why?

They're trying to stop people spaffing it all by the time they're 62 and being a drain on the tax payers (which there wont be ebough of) for another 25 years.

You're free to save money in places whcih don't give tax breaks if you prefer

[Count Steer]

Why?

They're trying to stop people spaffing it all by the time they're 62 and being a drain on the tax payers (which there wont be ebough of) for another 25 years.

You're free to save money in places whcih don't give tax breaks if you prefer

It's not that long since you couldn't get your hands on your pension at 55 never mind pulling a tax free chunk out of it. Not really thought through given increasing life expectancies and declining birth rates eh?

[Horse]

The only thing that gives me the hump is the £5k special allowance that disappears entirely once you earn a pound in income that comes from paid employment, so you can quite literally be worse off because you work.

Do you have a link for info on that?

All I can see on .gov is:
Your tax-free Personal Allowance
The standard Personal Allowance is £12,570, which is the amount of income you do not have to pay tax on.

Your Personal Allowance may be bigger if you claim Marriage Allowance or Blind Person’s Allowance. It’s smaller if your income is over £100,000.

I'm drawing a final salary type pension, and will get the state pension later this year.

But I also work part-time - and won't get anywhere near enough to cover £5k, whether as additional tax-free or anything else.

[Yorick]

We get by on under £3k a month. Obviously we have no heating bills but it costs us about £3,000 in private health costs.
We live very nicely, but not spending for the sake of it.

[Count Steer]

Anyway, just out of interest, what do you reckon is enough to retire with?
(if your house is paid for, you have no debt and you have sensible expectations)

My mate did it a couple of years ago with half a million in the bank, him and his wife work a couple of days a week in department stores and that pays all of his bills and most of his food money, so he only dips into his half a million for the odd holiday or something. My other mate did it on £750k that he has invested in bonds returning about 5% and he doesn't work at all, he has about £3k a month coming in and that's enough.

I really don't know what a lump sum figure would be tbh - and people's needs/expectations vary. I think if I worked out the lump sum equivalent of our company pensions I'd be a bit (Although we both left the jobs with final salary pensions some years before we actually retired so didn't have the full 40/60ths of final salary or whatever the max was in them. I know some people that stuck with average jobs in companies like that and their buy out figure for their pension - if they'd been daft enough to accept - was over £1M).

If I waved a wet finger in the air I'd say, for a couple, used to a reasonably comfortable existence, £3k a month is a minimum, £5k a month is 'comfy' and an emergency stash is a nice to have. As I say, needs/expectations vary and £3k/month would keep some folk quite happy.

[weeksy]

Hold on a sec. Without a mortgage you think £3000 a month is a minimum and £5000 a month comfortable?

They seem very high to me.

[Yorick]

Hold on a sec. Without a mortgage you think £3000 a month is a minimum and £5000 a month comfortable?

They seem very high to me.

We came over here with a pot of cash.
When we bought this villa, we worked out that we had about £30k a year to live on till our pensions kicked in 12 years away

And we've kept to that quite easily.

The income from the apartment also meant that the pot is still healthy.

[Dodgy69]

Reckon we could manage on £1500 a month.

[Buckaroo]

Anyway, just out of interest, what do you reckon is enough to retire with?
(if your house is paid for, you have no debt and you have sensible expectations)

My mate did it a couple of years ago with half a million in the bank, him and his wife work a couple of days a week in department stores and that pays all of his bills and most of his food money, so he only dips into his half a million for the odd holiday or something. My other mate did it on £750k that he has invested in bonds returning about 5% and he doesn't work at all, he has about £3k a month coming in and that's enough.

I really don't know what a lump sum figure would be tbh - and people's needs/expectations vary. I think if I worked out the lump sum equivalent of our company pensions I'd be a bit (Although we both left the jobs with final salary pensions some years before we actually retired so didn't have the full 40/60ths of final salary or whatever the max was in them. I know some people that stuck with average jobs in companies like that and their buy out figure for their pension - if they'd been daft enough to accept - was over £1M).

If I waved a wet finger in the air I'd say, for a couple, used to a reasonably comfortable existence, £3k a month is a minimum, £5k a month is 'comfy' and an emergency stash is a nice to have. As I say, needs/expectations vary and £3k/month would keep some folk quite happy.

Yep, just about spot on. I've shared my info previously, so won't state it again, but I think your damp digit is pretty accurate.

[Treadeager]

I reckon those two figures are in the right " ball park "

[Horse]

Hold on a sec. Without a mortgage you think £3000 a month is a minimum and £5000 a month comfortable?

They seem very high to me.

It's fairly easy to get a (as CS says) finger in the air estimate.

Add up all your regular monthly bills
Add in irregular amount for dentist, opticians, with respective treatments, car services & tyres, etc., etc.
Add in annual one-offs such as insurance renewals, AA membership, etc.
Add in extras: birthdays, Christmas, holidays
Add in house repairs (new boiler, new roof?), furniture, redecorating, clothes, etc.
Then spend time thinking of everything you might do and might spend.

Your life will change. Try to imagine how and the costs involved will change too.

Then contingency. Think about how fuel bills have changed.

[Count Steer]

Hold on a sec. Without a mortgage you think £3000 a month is a minimum and £5000 a month comfortable?

They seem very high to me.

I've just trawled through a typical month of bank transactions.

House (tax, energy, water, phone/BB/mobiles, insurance) - £820
Shopping (food, coffees, consumables - no clothes, tools etc etc) - £800
Petrol - £124

So that's £1744 gone.

Apart from petrol there's nothing in there for car insurance, maintenance....or purchase. Nothing for clothes, TV licence, streaming etc or towards stuff for the house, I've ignored Amazon, Screwfix outgoings that month and optionals like Spotify and dental insurance). If you haven't got a decent kitty you'll need to save towards stuff like cars, bicycles, house repairs, decorating, holidays. (Knee replacements? ).

Sure, two can live on less than £3k a month, but I wouldn't want to.

[Mr. Dazzle]

You wanna cut back in the fois gras, that'll see you reet

[Count Steer]

You wanna cut back in the fois gras, that'll see you reet

I was a bit surprised by the food+ £s but, it did include one of our occasional Ocado deliveries where we stock up on store cupboard stuff as well as the scran for the week....that was £189 It really is an all-in figure based on transactions to 3 supermarkets and a café. People might get a surprise if they do the exercise.

Oh yeah....there's absolutely £0 in the figures up there ^^^ for meals out, of any sort.

PS. There's no booze of any sort in the numbers either.

[Zimbo]

I did a huge spreadsheet, took all our current living costs (not including mortgage) which came to £34K/year when you include a couple of holidays and a couple of grand for contingencies plus a "reasonable" amount of discretionary spending each (£250/month each seemed reasonable). I increased it year on year by an estimated inflationary amount (just under 3%), which takes it £46K/year in ten years time and £57K in twenty years time, £73K/year in thirty years time and so on. The compounded effects of inflation are a bit scary!
I then took our current savings and investments and increased their value year on year based on expected returns, factored in the missus's final salary pension that she's already drawing (plus forward inflationary adjustments), 2 x full state pensions when we reach that age (again, inflation adjusted, using the same inflation figure I based our spending on) and used that to work out when we can stop working, which was actually much sooner than we expected. It was a very useful (and satisfying) exercise, I redid twice more to "sanity check" the figures, and we are fairly happy with it - as long as inflation, savings rates and share dividends stick to reasonable levels! I deliberately didn't factor in inheritance as a safety buffer.
Based on the better than expected result, we both dropped to working three days a week, which has been brilliant, missus's pension makes that possible.

[Yorick]

Council tax plus tax for all the vehicles is total of €800.
Zero heating bill.

Food is cheap and we don't need to buy lots of clothes.
Don't need holidays to the sun
Fuel is €1.30

We had to move away from UK to retire early

[mangocrazy]

The only thing that gives me the hump is the £5k special allowance that disappears entirely once you earn a pound in income that comes from paid employment, so you can quite literally be worse off because you work.

Do you have a link for info on that?

All I can see on .gov is:
Your tax-free Personal Allowance
The standard Personal Allowance is £12,570, which is the amount of income you do not have to pay tax on.

Your Personal Allowance may be bigger if you claim Marriage Allowance or Blind Person’s Allowance. It’s smaller if your income is over £100,000.

I'm drawing a final salary type pension, and will get the state pension later this year.

But I also work part-time - and won't get anywhere near enough to cover £5k, whether as additional tax-free or anything else.

I'd definitely like to know more about 'the £5k special allowance'...