How much do you need to retire?

[enfieldspares]

15 hours ago, sitsinhedges said:

 

It was my intention to quit at 60 in a  year but a rotor cuff tear has stopped me doing my job and it sounds like it'll pretty much write this year off financially before it's sorted. 

 

My advice is claim every single penny of Universal Credit and...in addition Sick Benefit. This means you will get other associated benefits such as Winter Fuel Allowance if claiming UC in the qualifying period and possibly discounts on Council Tax. So do seek advice on this. You have paid your "stamp" and now it's time for the Government to pay you the "divi". 

[Lloyd90]

3 hours ago, oldypigeonpopper said:

Hello, Good post Lloyd, What is the amount of money your left if they take savings and pension ?

Savings your allowed to “keep” what’s over the allowance, it’s around £23,500 (double that for Wales). 
 

Pension wise, I think it all goes towards your care costs. 
 

People need to be careful if they’re reliant on their wife or husbands pension for living expenses as that can vanish at a moments notice. 
 

 

[Dave-G]

We get by on a joint pension income of nearly 19K + wife's lower level PIP benefits. 

The mortgage is paid off but we drew a modest equity release on it which has all but gone mainly to help the kids a little.

We run two old small petrol cars and the wife does bingo 3 nights a week. I'm a virtual recluse now to make up for all my gallivanting about and other selfish indulgences while taxi driving before I retired at 64 after getting mugged by five Somalians.

I've often wondered what happens to our house if one partner needs care and subsequently passes away but the other lives on well enough to remain in the house for a few years. Does the council still take/recover costs on the house for the deceased partner that needed care?

Edited October 24 by Dave-G

[Lloyd90]

3 minutes ago, Dave-G said:

We get by on a joint pension income of nearly 19K + wife's lower level PIP benefits. 

The mortgage is paid off but we drew a modest equity release on it which has all but gone mainly to help the kids a little.

We run two old petrol cars and the wife does bingo 3 nights a week. I'm a virtual recluse now to make up for all my gallivanting about and other selfish indulgences while taxi driving before I retired at 64 after getting mugged by five Somalians.

I've often wondered what happens to our house if one partner needs care and subsequently passes away but the other lives on well enough to remain in the house for a few years. Does the council still take/recover costs on the house for the deceased partner that needed care?

Whilst one of you remains living in the home it is discounted. 
 

The issue you may face is that the one remaining at home might struggle to live off their sole pension income whilst their housing / living expenses (council tax, bills, home upkeep) remains the same but they are now paying for it solely whilst also trying to live off what’s left. 

[Dave-G]

3 minutes ago, Lloyd90 said:

Whilst one of you remains living in the home it is discounted. 
 

The issue you may face is that the one remaining at home might struggle to live off their sole pension income whilst their housing / living expenses (council tax, bills, home upkeep) remains the same but they are now paying for it solely whilst also trying to live off what’s left. 

Thanks Lloyd - my main worry is losing one of the incomes, I worry if we could manage on either my £10,617.60 PA or Carols lower pension + PIP is similar, though she'd then qualify for pension credits. Single person council tax looks like it may be withdrawn by Labour.

The equity release scheme has a further 6K drawdown facility if needed. W'd sell off for not much money one car and save insurance, tax and maintenance costs though.

[Dave at kelton]

2 hours ago, Lloyd90 said:

Sad to think that two people who worked all their lives may be struggling by on a £30-35k a year income. 
 

At 34 (soon to be 35) my pension is worth just under £8k a year payment. 
 

The biggest issue is going to be they keep putting the age up and up before you can access it!! 
 

I will be going as soon as possible. 

Unfortunately the way it is and we are the fortunate ones as we have more than the state pension and no mortgage!

[clangerman]

16 hours ago, sitsinhedges said:

I'm just wondering if I can stretch my money and give up now.

your only requirement is not starving because I would now give every penny I have including the house for a new pair of lungs! 

[sitsinhedges]

2 hours ago, enfieldspares said:

My advice is claim every single penny of Universal Credit and...in addition Sick Benefit. This means you will get other associated benefits such as Winter Fuel Allowance if claiming UC in the qualifying period and possibly discounts on Council Tax. So do seek advice on this. You have paid your "stamp" and now it's time for the Government to pay you the "divi". 

I don't think I would qualify because I have savings.

15 minutes ago, clangerman said:

your only requirement is not starving because I would now give every penny I have including the house for a new pair of lungs! 

I want to do bit more than 'not starve' ☺️

[Wymondley]

I packed up last year at 60, I'd had enough of work both physically and mentally.

I was worried about how I'd survive on a modest private pension and some savings, even though there's just me (and the cat).

I was amazed at how little I actually needed day to day, no more commuting and all the costs that go with that, £400 a month in diesel alone, lunch, tools etc.

Just pack up... If you've reached the end of your tether with work, do it, don't worry about the money, you'll survive but believe me you'll feel so much better for it.

 

 

 

[Lloyd90]

50 minutes ago, Wymondley said:

I packed up last year at 60, I'd had enough of work both physically and mentally.

I was worried about how I'd survive on a modest private pension and some savings, even though there's just me (and the cat).

I was amazed at how little I actually needed day to day, no more commuting and all the costs that go with that, £400 a month in diesel alone, lunch, tools etc.

Just pack up... If you've reached the end of your tether with work, do it, don't worry about the money, you'll survive but believe me you'll feel so much better for it.

Fear of the unknown, don’t want to be cheeky but do you mind disclosing what you consider a “modest” pension that you are able to live off? 
 

Everyone’s definition of a modest and bare necessities differ. 

[oowee]

23 hours ago, marsh man said:

Asking how much you need to live on when you retire is really a very difficult question as everyone have a slightly different lifestyle , I was a jobbing bricklayer and pay wise I had a good job , good money and all the shooting I wanted , sound ideal but my back was suffering as I was approaching 60 , so enough was enough and I called it a day , this was on my tools , I did help on the shoots for picking up pay and a brace of birds , taking one or two clients out shooting , the odd bit of digger work in my own time , little bits and pieces came my way like getting paid to take the entrance money to one the functions the estate put on , so maybe I was fairly lucky with getting a few bob coming in here and there , I also had some savings that were making interest and some shares where I was getting some small dividends , so time I got my state pension at 65 I had used very little of my original savings , I now I live exactly how I want to live on more or less my state pension , a very small private pension and still get a decent amount of money from my savings , I run a car , got my own house , eat fairly well and haven't been away on a holiday for years , I do live in a nice county and don't need to go anywhere else as I like it where I am , all in all a very contented person .    MM

This is the answer.

23 hours ago, TOPGUN749 said:

I retired 2.5 years before my pension and got through £20,000. It depends what you want to spend on really. Some can live happily on £10,000 a year and others feel they need £30,000 a year.

I cannot understand these figures. £20k over 2.5 years is only £8000 a year. l am in for fixed costs of £600 a month(£7200 annual) and then I need to eat something. 

[shaun4860]

1 hour ago, oowee said:

This is the answer.

I cannot understand these figures. £20k over 2.5 years is only £8000 a year. l am in for fixed costs of £600 a month(£7200 annual) and then I need to eat something. 

Don’t you have one of the gold plated civil service pensions?

[shaun4860]

11 hours ago, Dave-G said:

Thanks Lloyd - my main worry is losing one of the incomes, I worry if we could manage on either my £10,617.60 PA or Carols lower pension + PIP is similar, though she'd then qualify for pension credits. Single person council tax looks like it may be withdrawn by Labour.

The equity release scheme has a further 6K drawdown facility if needed. W'd sell off for not much money one car and save insurance, tax and maintenance costs though.

Once your wife hits state pension age I would advise asking PIP for a review.

They won’t be able to look at the mobility part of pip but maybe eligible for the high rate of Attendance Allowance.

Would give her a bit more each week.

It’s all based on medical evidence with no physical assessment.

Only difference between low rate and high rate AA is low rate is paid if you have difficulty for day OR night, high rate is paid if you have difficulties for both day AND night.

[Dave-G]

30 minutes ago, shaun4860 said:

Once your wife hits state pension age I would advise asking PIP for a review.

They won’t be able to look at the mobility part of pip but maybe eligible for the high rate of Attendance Allowance.

Would give her a bit more each week.

It’s all based on medical evidence with no physical assessment.

Only difference between low rate and high rate AA is low rate is paid if you have difficulty for day OR night, high rate is paid if you have difficulties for both day AND night.

Cheers - she doesn't get AA as I am her unpaid carer. It seems she would have got the higher rate if she needed walking aids before her pension start date but was about a year too late.

[elgreco]

After recovering from COVID in 2020 I decided life was too short to wait till 60 (as I had planned) for retirement and left at 56. I had already transferred my pension pot from my company to a SIPP and now drawdown on the investments each month. We have paid off the mortgage and have no outstanding debts so it’s just living expenses and hobbies to pay for plus the odd holiday. I draw £2300 a month which find more than adequate and can always up the figure if needed. My financial advisor does the computer modelling and says it will last longer than me more than likely so I’m happy with that. 

[sitsinhedges]

7 hours ago, elgreco said:

After recovering from COVID in 2020 I decided life was too short to wait till 60 (as I had planned) for retirement and left at 56. I had already transferred my pension pot from my company to a SIPP and now drawdown on the investments each month. We have paid off the mortgage and have no outstanding debts so it’s just living expenses and hobbies to pay for plus the odd holiday. I draw £2300 a month which find more than adequate and can always up the figure if needed. My financial advisor does the computer modelling and says it will last longer than me more than likely so I’m happy with that. 

Is that as a couple?

[Lloyd90]

7 hours ago, elgreco said:

After recovering from COVID in 2020 I decided life was too short to wait till 60 (as I had planned) for retirement and left at 56. I had already transferred my pension pot from my company to a SIPP and now drawdown on the investments each month. We have paid off the mortgage and have no outstanding debts so it’s just living expenses and hobbies to pay for plus the odd holiday. I draw £2300 a month which find more than adequate and can always up the figure if needed. My financial advisor does the computer modelling and says it will last longer than me more than likely so I’m happy with that. 

The real question is, how much do you have in the SIPP to make that viable… 

[Bobba]

An article in The Times (BBC App), on potential threat to pensioners by the Chancellor’s forthcoming budget, states that not enough people are saving sufficient for a pension for comfortable living suggested to be £14,000 annually. It was unclear whether this is inclusive of state pension but I suspect it is because people would need a very large pension pot for it alone to produce £14k annually.

Edited October 25 by Bobba

[JohnfromUK]

2 minutes ago, Bobba said:

states that not enough people are saving sufficient for a pension for comfortable living suggested to be £14,000 annually.

Which I guess raises two points.

First - I agree that people aren't saving enough, but raids on pension savings by Gordon Brown, 'expected' raids by Rachel Reeves, a continuous flow of changes to rules which make long term planning uncertain and unreliable - have the effect of stopping people saving.  To save for a pension (or anything else, but typically the pension extends over the longest time) you need to have;

1. Security - in that the savings should be protected and safe (in as far as reasonably possible when investing).  In terms of individual fund/country/region/investment area (oil, energy, banking, utilities, construction, insurance etc.) a good fund manager will spread the risks both in investment area and geographical area - and so minimise risk (it will be low, but still some risk).
2. Defined investment environment - in terms of tax treatment, regulations, ability to withdraw, ability to claim reliefs, flexibility to adapt to career path.
3. Safety from crime, theft, scam, raids.  Using a "Pensions Regulator" goes a long way to providing this, but you have to choose a scheme they approve/over see.

On these, a good pensions adviser can help minimise risk by ensuring diversity.  It is the DUTY of Government to set up rules and legislation to support a stable and safe pensions environment - and one that encourages saving.  Whilst there have been many well documented 'scams' - particularly aimed at persuading people with decent 'pension pots' to invest in various scam schemes BUT the biggest 'raid' was by Government itself - and it looks like that may well be about to be repeated. 

No one will feel confident to invest in a pension whilst certain Governments see a pensioners saved up fund as an invitation to steal it.

Secondly - I find the £14,000 figure doubtfully low - when the UK 'minimum' wage will bring in around £23,750 a year.

[oowee]

18 minutes ago, Bobba said:

An article in The Times (App), on potential threat to pensioners by the Chancellor’s forthcoming budget, states that not enough people are saving sufficient for a pension for comfortable living suggested to be £14,000 annually. It was unclear whether this is inclusive of state pension but I suspect it is because people would need a very large pension pot for it alone to produce £14k annually.

Circa £350k on the basis of an annuity (4%) or approx £250k in savings living 18 years post retirement. For some taking equity from the house by down sizing is another way to fund the pot. 

It's certainly not easy and many will live for today rather than think of the future. My daughter's pay slip is 40% tax, 10% student loan, 13.5% pension. 

10 hours ago, shaun4860 said:

Don’t you have one of the gold plated civil service pensions?

Very few Civil Servants have them now. Private pension for me. 

2 minutes ago, JohnfromUK said:

 

On these, a good pensions adviser can help minimise risk by ensuring diversity.  It is the DUTY of Government to set up rules and legislation to support a stable and safe pensions environment - and one that encourages saving.  Whilst there have been many well documented 'scams' - particularly aimed at persuading people with decent 'pension pots' to invest in various scam schemes BUT the biggest 'raid' was by Government itself - and it looks like that may well be about to be repeated. 

No one will feel confident to invest in a pension whilst certain Governments see a pensioners saved up fund as an invitation to steal it.

Secondly - I find the £14,000 figure doubtfully low - when the UK 'minimum' wage will bring in around £23,750 a year.

There is a lot of scaremongering around but I guess that's based on the Gordon Brown history. I don't see any evidence that it will be repeated. 

[marsh man]

A lot of these figures above are way to much for my small brain to cope with and at nearly 77 adding or taking out anything from a private pension is now far to late , what I would like to say is the £20 or so I added to my private pension when I was working didn't seem to make a lot of difference to what I am getting in this day and age , in fact it wouldn't hardly keep me and my dog in food for a week least alone a month , for at least the last two years the tax man have been taking out exactly half of my monthly pension  which  wasn't a lot to begin with , I looked after my money when I was earning it and overall done a good job , a far better job than the financial adviser we had from Scottish Widows who advised us to put in the pot as much as possible , I am very , very glad I didn't follow his advise .   MM 

[JohnfromUK]

3 minutes ago, oowee said:

There is a lot of scaremongering around but I guess that's based on the Gordon Brown history. I don't see any evidence that it will be repeated.

We will see.  I agree that it isn't yet anything more that 'press speculation' at present which is why I used the word 'expected'.

My own 'guesses' are that there will be significant (negative to the pensioners) changes, very probably including some or all of;

• reduction in the tax free 'lump sum' allowed (which will badly impact those planning to pay off remaining mortgage balances on retirement)
• changes to early withdrawal facilities - and ages at which they can be invoked
• inclusion of the pension pot in the estate of a deceased person
• possible changes (again) to the lifetime limits - but I think this less likely
• changes to the tax/NI treatment of employers contributions into pensions (I am well past that now, so not really clear how this stands now and may change).

None of those will boost the confidence of people contemplating putting money into a pension.  From my point of view - putting the pension pot into my estate for IHT would negate a long term 'plan' to provide my executors with liquid funds to pay any inheritance tax that may be due (should my estate be above the threshold at probate).  Hence my comment about needing long term stability to do the prudent planning.

As executor for my late father, where some (relatively little and mainly due to his house value) IHT was payable and finding the funds would have been a problem had we not made provision to have liquid funds (provided by a life assurance in favour of the executor) available.  Sorting probate can be VERY drawn out (ours was many months and it is much worse now) and the banks charge a fortune for bridging loans to raise the funds needed to allow probate to be granted.  IHT needs to be paid in full (certainly for 'normal amounts' until probate can be granted and no funds can be raised from the estate itself until that is done and IHT settled).  It is very tough and the rules very unhelpful at one of life's most difficult times.

[Mice!]

31 minutes ago, oowee said:

There is a lot of scaremongering around but I guess that's based on the Gordon Brown history. I don't see any evidence that it will be repeated

I'll bet you wouldn't put money on it, the way Labour are going they seem happy to take money from wherever they can, and raiding pensions again seems like an easy target.

[old man]

50 minutes ago, marsh man said:

A lot of these figures above are way to much for my small brain to cope with and at nearly 77 adding or taking out anything from a private pension is now far to late , what I would like to say is the £20 or so I added to my private pension when I was working didn't seem to make a lot of difference to what I am getting in this day and age , in fact it wouldn't hardly keep me and my dog in food for a week least alone a month , for at least the last two years the tax man have been taking out exactly half of my monthly pension  which  wasn't a lot to begin with , I looked after my money when I was earning it and overall done a good job , a far better job than the financial adviser we had from Scottish Widows who advised us to put in the pot as much as possible , I am very , very glad I didn't follow his advise .   MM 

Sadly my son did. Wipeout!

[old man]

39 minutes ago, Mice! said:

I'll bet you wouldn't put money on it, the way Labour are going they seem happy to take money from wherever they can, and raiding pensions again seems like an easy target.

I don't see much difference bud? All colours have fiscal fun at the expense of the electorate but very little ever impacts them personally, because there's always a relative to supposedly employ?