general enquiry about Pensions and Life Savings (and stuff)

[Lost Leopard Spot]

I've still got eight years before official state sponsored retirement age. I was reading an article about annuities yesterday and panic gripped my soul. Basically, like a lot of people I haven't really been interested about provision for old age... I just kind of thought that one day I'd get round to squirrelling some nuts away for the long hard winter of old age, but somehow autumn has crept up on me and the winter chill ain't far away now.

I tried talking to a few blokes at work and in the pub, but like always when a subject that approaches on the sacrosanct subject of 'wages' and savings comes up everybody goes dead shtum and talks in vague generalities.

So, without being vague: I've got a pension at work - it is set to deliver the stunning amount of £1,286.91p in two years time. And neither does it deliver a tax free lump sum, but half of that would go to my missus if I were to die. It cannot be extended and is not transferable into the pension scheme of my present employers but I can go onto another scheme if I want (and start again from scratch)
I do not have enough 'years' of NI contibutions (having enjoyed a feckless life abroad in my mid-late twenties and early thirties) for the full state pension. It is projected to deliver to me in eight years time a pension of £3980 pa.
I have a house with another five years of mortgage payments due on it. I have no intention of remortgaging or doing any kind of draw down scheme on it.
My life savings (all of them, inc future capitalisations on an endowment, savings accounts, and ISAs; and after calculating the rate of savings I'm averaging over the last six years) will come to (approx) £26,000.
My missus, in eight years time will get a projected pension of £12,200 (inflation proofed) and a tax free lump sum of £27,500.

So in eight years time between us we will have total lifetime savings of £53,000 and a combined annual income of £22,967. When seen in black and white, that scares the living daylights out of me.

Am I about average? do I have more, or less savings than normal folk? Can two people survive on just £23,000 a year without being totally poverty stricken? I have no idea, none whatsoever.

[Montreal Wanderer]

I cannot help you on UK rules but there seems something wrong with your mathematics. If your wife has a pension of 12,200 and you have one of 3980, how does this compute to joint earnings of 22967? This comes to 16180. If the 1287 you mentioned is an annual pension (that wasn't clear to me) I still can't get to the figure you quoted.

[thebish]

surely two people can EASILY survive on £23,000 a year in relative comfort!! that's nearly £500 a week! how many copies of Sudoku Weekly do you think you'll need??

[Lost Leopard Spot]

surely two people can EASILY survive on £23,000 a year in relative comfort!! that's nearly £500 a week! how many copies of Sudoku Weekly do you think you'll need??

I don't know, but that's before tax. And council tax is about £1,500 a year and electic, gas and other heating comes in at about £1,500 a year. It all adds up, and quite staggeringly quickly too.

[Lost Leopard Spot]

I cannot help you on UK rules but there seems something wrong with your mathematics. If your wife has a pension of 12,200 and you have one of 3980, how does this compute to joint earnings of 22967? This comes to 16180. If the 1287 you mentioned is an annual pension (that wasn't clear to me) I still can't get to the figure you quoted.

The figures are:
State Pension - me £3,980
State Pension - missus ~£5,500
Private Pension - me £1,287
Private Pension - missus £12,200
= £22,967pa

[thebish]

surely two people can EASILY survive on £23,000 a year in relative comfort!! that's nearly £500 a week! how many copies of Sudoku Weekly do you think you'll need??

I don't know, but that's before tax. And council tax is about £1,500 a year and electic, gas and other heating comes in at about £1,500 a year. It all adds up, and quite staggeringly quickly too.

i don't really dare add mine up... though - i will have whacked in my full NI contributions (and so will the missus) so we will both get full state pensions - and we have a company scheme.. no idea what it will amount to, though there won't be any lump sums involved.. maybe i should look into it - it's only 17yrs off now... (until the goalposts are moved again!)

total savings at the moment are about £24,000

[thebish]

I cannot help you on UK rules but there seems something wrong with your mathematics. If your wife has a pension of 12,200 and you have one of 3980, how does this compute to joint earnings of 22967? This comes to 16180. If the 1287 you mentioned is an annual pension (that wasn't clear to me) I still can't get to the figure you quoted.

The figures are:
State Pension - me £3,980
State Pension - missus ~£5,500
Private Pension - me £1,287
Private Pension - missus £12,200
= £22,967pa

just as well the missus is worth summat!!

[Lost Leopard Spot]

Absolutely. I told her back then that I was only marrying her for her pension. She's my nuts I've been squirelling away.

[Prufrock]

You can easily live on 23kpa if the mortgage is paid, but, without being morbid, particularly given you've no kids, there may be costs later in life you want to be saving for. Why the aversion to remortgaging if you don't mind me asking? That or one of those sell it and rent it back things.

[TANGODANCER]

surely two people can EASILY survive on £23,000 a year in relative comfort!! that's nearly £500 a week! how many copies of Sudoku Weekly do you think you'll need??

I don't know, but that's before tax. And council tax is about £1,500 a year and electic, gas and other heating comes in at about £1,500 a year. It all adds up, and quite staggeringly quickly too.

In eight years time a loaf of bread will cost about £25 and fried cod from the chip-shop will cost £37 each. You will be paying "being alive" tax, "love thy neighbour" tax and the council will own your house and possessions. If you can't manage, a one-way ticket to North Korea is available on request.

[Lost Leopard Spot]

total savings at the moment are about £24,000

Thank God somebody's actually told me. I thought maybe people weren't speaking about it because maybe they were just laughing at how pathetically tiny my savings were, or other equally disastrous scenarios my fevered mind was dreaming up. So I'm not too far off what you'd consider 'doable' then, given I've only got eight years to re-plan the rest of my entire life.

[mummywhycantieatcrayons]

Do you have to stop working in 8 years though?

[Lost Leopard Spot]

You can easily live on 23kpa if the mortgage is paid, but, without being morbid, particularly given you've no kids, there may be costs later in life you want to be saving for. Why the aversion to remortgaging if you don't mind me asking? That or one of those sell it and rent it back things.

I know a friend who's had their fingers very badly burnt on one of those equity release schemes.
I've spnt most of my life trying to get away from neighbours - now I've finally realised it I don't want to recklessly give that advantage away just through a hunt for extra 'revenue'.

[thebish]

total savings at the moment are about £24,000

Thank God somebody's actually told me. I thought maybe people weren't speaking about it because maybe they were just laughing at how pathetically tiny my savings were, or other equally disastrous scenarios my fevered mind was dreaming up. So I'm not too far off what you'd consider 'doable' then, given I've only got eight years to re-plan the rest of my entire life.

you'll also own your house and so be sitting on/in a massive pile of realisable cash (which I certainly won't!)... sell the house - buy a luxury camper van - live out your retirement on the road with no ties and cash-rich!

[Lost Leopard Spot]

Do you have to stop working in 8 years though?

No.
But to be honest we were planning (although in reality I should be using the word 'hoping' there rather than planning) on retiring when we'd paid off the mortgage in five years time - aged 63. The thought now of slogging onwards makes me feel quite sick at heart...

[Lost Leopard Spot]

surely two people can EASILY survive on £23,000 a year in relative comfort!! that's nearly £500 a week! how many copies of Sudoku Weekly do you think you'll need??

I don't know, but that's before tax. And council tax is about £1,500 a year and electic, gas and other heating comes in at about £1,500 a year. It all adds up, and quite staggeringly quickly too.

In eight years time a loaf of bread will cost about £25 and fried cod from the chip-shop will cost £37 each. You will be paying "being alive" tax, "love thy neighbour" tax and the council will own your house and possessions. If you can't manage, a one-way ticket to North Korea is available on request.

I've always fancied doing a diamond heist. I reckon I'd be a good master criminal. That's my other option TD.

[mummywhycantieatcrayons]

Do you have to stop working in 8 years though?

No.
But to be honest we were planning (although in reality I should be using the word 'hoping' there rather than planning) on retiring when we'd paid off the mortgage in five years time - aged 63. The thought now of slogging onwards makes me feel quite sick at heart...

Could you move to fewer days a week/something you find more enjoyable as part of the calculations?

[Lost Leopard Spot]

you'll also own your house and so be sitting on/in a massive pile of realisable cash (which I certainly won't!)... sell the house - buy a luxury camper van - live out your retirement on the road with no ties and cash-rich!

I also know two people who've done very similar to that too...
One of them's having the time of their life, and managing very very well...
The other is spiralling into the life of a penurious tramp, has contracted TB and doesn't have long left before he'll be put out of his misery.

[Worthy4England]

total savings at the moment are about £24,000

Thank God somebody's actually told me. I thought maybe people weren't speaking about it because maybe they were just laughing at how pathetically tiny my savings were, or other equally disastrous scenarios my fevered mind was dreaming up. So I'm not too far off what you'd consider 'doable' then, given I've only got eight years to re-plan the rest of my entire life.

Guess the other thing to consider, other than equity release, is possible "downsizing"....but that means upping sticks...

[Lost Leopard Spot]

Do you have to stop working in 8 years though?

No.
But to be honest we were planning (although in reality I should be using the word 'hoping' there rather than planning) on retiring when we'd paid off the mortgage in five years time - aged 63. The thought now of slogging onwards makes me feel quite sick at heart...

Could you move to fewer days a week/something you find more enjoyable as part of the calculations?

I/we have played with the idea of running my/our own business [either as an antique dealer, or as a freehold pub with the missus doing the catering]. But one of those options is one hell of a huge risk with all of our assets involved. Not sure retirement age is the right time to be making gambles like that. But we haven't totally ruled it out either. We'd move somewhere up in north Scotland or similar and cater to the clientele I know (beer loving walkers with dogs).