"Retired and living on £11k a year – this is how I spend my money"

[Itsallaguess]

‎
An article in the Telegraph from a retired gentleman who's watching his spending budget for three years until his state-pension kicks in -

‘I’m divorced, retired and living on £11k a year – this is how I spend my money’ - Our reader lives frugally, yet happily, within his means -

https://archive.ph/BUbTl

I particularly like how, even though he was in work as a self-employed consultant, he valued an early-retirement that he'd honestly assessed would need some financial savvy to work through during the intervening three years before he gained access to his state-pension.

He's clearly done so in a clear-eyed way that prioritises his own needs, and I hope he really enjoys that additional state-pension when it comes on stream for him.

Cheers,

Itsallaguess

[Lootman]

Impressive but presumably possible only because he appears to have no housing costs, not even council tax.

Nothing destroys wealth like divorce.

[kempiejon]

When I was made redundant 15 years ago I had perhaps a similar lifestyle including shopping daily for reduced items, mooching about, gardening, long walks, visiting friends I also fitted in some volunteering and paddling on the canal ( canoe club membership of about £60 a year gave me access to craft). £300 on food for him and his cat seems excessive to me, I was feeding myself for more like £100 per months but I didn't have a cat. £1-2 main meals were achievable - bloody food inflation.
It's living and as there's an end point in sight it's fairly achievable but I think it's ice to have things and experiences. Sill in a couple of years his income will double and that'll be nice.

Still I also assume many things in newspapers are made up.

[Arborbridge]

Impressive but presumably possible only because he appears to have no housing costs, not even council tax.

Nothing destroys wealth like divorce.

As I know to my cost.....
but then I married a women who had never had children and had a house of her own. With a "spare" house we were then better off than either of us was previously as we could put that capital to work. My ex also married again to a very successful widower with his own house and children (grown up and independent before their marriage). So, I think we've gained all round as it happens - and the grandchildren have many more grandparents or grandparents-in-law than most.

All's well that Ends Well, in this case.

Arb.

[Dicky99]

When I was made redundant 15 years ago I had perhaps a similar lifestyle including shopping daily for reduced items, mooching about, gardening, long walks, visiting friends I also fitted in some volunteering and paddling on the canal ( canoe club membership of about £60 a year gave me access to craft). £300 on food for him and his cat seems excessive to me, I was feeding myself for more like £100 per months but I didn't have a cat. £1-2 main meals were achievable - bloody food inflation.
It's living and as there's an end point in sight it's fairly achievable but I think it's ice to have things and experiences. Sill in a couple of years his income will double and that'll be nice.

Still I also assume many things in newspapers are made up.

Including my utilities and council tax I've been living on about £14k a year mortgage free for 2.5 years since taking early retirement at 57.
I've had to be sensible but it doesn't feel like I've been living frugally on that budget. I enjoy cooking and so I eat well, meet pals at the pub 3 times a week, eat out a few times a month, play golf a couple of times a month and I've had 3 foreign short trips away and numerous UK short breaks.
£14k doesn't sound much to live on but if I were working, paying rent or a mortgage, funding an essential car loan and paying commuting costs I guess I'd need a job paying £40k gross to have a similar level of disposable income.
My disposable income will almost double next year when I get my DB pension however, other than maybe an occasional longer foreign trip, I don't expect my spending habits will change very much.

[Itsallaguess]

£14k doesn't sound much to live on but if I were working, paying rent or a mortgage, funding an essential car loan and paying commuting costs I guess I'd need a job paying £40k gross to have a similar level of disposable income.

I think this is a key point regarding discussions like this, and it's worth remembering that the stage of life where many people might start to consider stepping away from their working life is very likely to be aligned with a time where things like mortgages have been paid off, and the removal of that demand along with other regular work-based costs can make quite a difference in spending-requirements when looking to calculate what we might actually be able to get by on...

It's certainly the case with some conversations I've had with friends and colleagues that people seem to mentally gravitate much more towards their headline salary figure when trying to think about what they might need in a post-work life, which tends to lock them into a way of thinking that scares them away from considering being able to survive on the types of much more modest figures being discussed in this article.

People often seem to feel that they've got to mentally calculate things from their current gross salary downwards, rather than thinking about their real post-tax requirements and then scaling back up, and I've always considered it to be no surprise that a common response from people once they do leave work is that they're actually managing to get by 'on less than they thought they'd need'...

I recall a resourceful poster here and back on the Motley Fool boards, who I'm not sure is still contributing, that compiled what I think was three graded, real-world 'yearly spending-scenarios', where the cheapest one read like being not much more than 'basic student living', with aspects like beans-on-toast and lentils, and then where he walked-up a couple of other different cost-scenarios with different levels of rising comfort.

It felt like a fairly extreme experiment for him to have actually gone and 'lived' through those costing-exercises to prove to himself that they were achievable, and I've been happy to mentally compile some similar 'scenario-based' calculations without having to act them out, but I think these types of exercises show levels of consideration that help enormously to validate possible post-work options, and try to avoid a situation where we might work for longer than really necessary and only afterwards wish that we'd properly considered these types of things much sooner...

Cheers,

Itsallaguess

[SalvorHardin]

I recall a resourceful poster here and back on the Motley Fool boards, who I'm not sure is still contributing, that compiled what I think was three graded, real-world 'yearly spending-scenarios', where the cheapest one read like being not much more than 'basic student living', with aspects like beans-on-toast and lentils, and then where he walked-up a couple of other different cost-scenarios with different levels of rising comfort.

It felt like a fairly extreme experiment for him to have actually gone and 'lived' through those costing-exercises to prove to himself that they were achievable, and I've been happy to mentally compile some similar 'scenario-based' calculations without having to act them out, but I think these types of exercises show levels of consideration that help enormously to validate possible post-work options, and try to avoid a situation where we might work for longer than really necessary and only afterwards wish that we'd properly considered these types of things much sooner...

I did something very similar before retiring. Though I didn't actually test them; it was more of a thought experiment. But it was quite eye opening once I took the cost of being in work out of my budget.

Most people underestimate how expensive it is to be in work. It isn't just the commute, or clothes, or childcare-related costs. A major cost of being in work is time pressure, which frequently causes you to spend more because you don't have the time to look for something else. You can't visit several supermarkets, so you do everything in the one visit. You're frequently rushed and spend money whereas if you weren't working you'd choose a cheaper alternative (e.g. pricey coffee / sandwwiches on the way to work vs. making a cup / breakfast in your kitchen). Many people will spend money buying a treat because of the stress caused by work.

If you're susceptible to "keeping up with the Joneses" there's a lot of that sort of pressure in the typical workplace. And you can't go to the cinema / golf club / various leisure facilities in the afternoon when it's cheaper (okay I rarely go to the cinema having been banned from my local and I don't play golf).

[yyuryyub]

I would be wary of expediture figures from recently retired people, if they had previously had large disposable incomes. Such people would have been able to spend money on all kinds of expensive things (new consumer goods, major house renovations, clothing, car etc). They might be surrounded by a wealth store of items in good condition and feel little need to spend on replacements. The clock is ticking and in due course, they may find that things break or wear out (depreciation of that wealth store). Then, they either have to add a fair amount of annual "exceptional items / capital expenditure / renewals", or they become the older person with lots of old worn out stuff.

The person in the Telegraph article was just living frugally whilst waiting for their state pension, but the state pension won't pay for endless major items (like house repairs, new heating system etc).

[Dicky99]

okay I rarely go to the cinema having been banned from my local .

Surely that revelation can't sneak by without explanation. Throwing popcorn, eating noisily, snoring or something worse perhaps

[GoSeigen]

When I was made redundant c2005 I decided to see if I could make a living on managing our investment portfolio alone. We were a family of four, soon to be five and initial capital of c£350,000 no property, and no other source of income. The chap in the article is living off £11000 per year which would have represented a 3% return on our capital; I had to support a whole family so I think the challenge was comparable. However our lifestyle never felt like we were scrimping. We were fortunate to live in one of the most affluent villages in SE England, in the midst of glorious countryside and with access to a huge variety of sports and kids activities. The kids took weekly cricket, rugby, tennis, judo, squash, ballet, gymnastics, swimming and music lessons. We all had bikes and spent a lot of time exploring the trails in the forests where we lived. We are life members of the National Trust so visited many of their properties. We took regular holidays and two year-long round-the-world trips as a family, regular visits to London, Olympics, Wimbledon, Twickenham etc. Where we did save was not buying crap -- rare trips to Costa, no Sky TV, no frivolous subscriptions. The other thing that made a huge difference is that we rented rather than owning our property. That released the capital to earn much better returns and saved us huge amounts of maintenance costs, as well as not buying all the crap you'd normally put in a house. And cars: we started with an Audi convertible but when no. 3 arrived we transitioned to much more modest vehicles suited to family life! Car insurance was typically <£300 per year and we had no other insurance policies at all. Finally, due to living in an affluent area the kids dressed really well, despite clothing often being hand-me-downs or from charity shops.

The lifestyle was wonderful and I got to spend huge amounts of time with the kids and the missus which was good for the former, maybe not so much the latter The only thing that really surprised and shook us is that our close family seemed to hate the way we lived and in some ways treated us with disdain. It seems if you don't buy the house, get the job and settle into "normal" life you are considered a loser.

We still are in similar semi-retirement --although our kids are much older, one at university the others in boarding school, and we've moved abroad and bought property with some land and a business which we run. Fortunately the investment capital has grown, so funds are not quite so tight. I have two slight regrets: that I maybe missed out on making a significant contribution in a corporate environment, and the negative reaction of other family members. Apart from that it's been a blast and I'd recommend it to anyone with similar motivations.

GS

[AsleepInYorkshire]

We've had to make do and mend over the last 2 years.

Health problems have stopped my income, again. Noting I am back on my little ol' feet and have [literally] just begun to shop around for work. Not fussed what I do and in the next week or two will be in Aldi, or similar I hope, humping boxes for a bit of cash

Had there not been increases in various bills we would be surviving (not thriving) on my good ladies salary alone which isn't huge. She has a job she loves, and we have relied on my income to give us nice things in the past. We have a daughter who's 16. She gets a very reasonable monthly allowance. No feedback please, we only have one child . She never asks for money past what she is given and at the end of each year usually hands back about £5-600 to be put in her JISA.

Our monthly costs have risen. We need about £500 per month to cover our bills over and above my good ladies net income. We could put some of our pensions which are in stocks into a bond to cover this, but I'm hoping to get into work and it's a decision for tomorrow as future events unfold. We aren't buying clothes or going on holiday, and we aren't buying Kellogg’s Chocolate Pops for £2.50. Tesco's own are 89p and taste just the same. Try some

We've made ends meet as we had some "rainy day money".

We run two cars (no debt on them) and have still managed to put £9K in our daughters JISA last year, although this year we aren't able to do so. We’ve also had to fork out for private health care to obtain a diagnosis for me (ADHD). We are spending £300 per month currently just to obtain my prescriptions. That will finish in about 2 months. I think we’ve spent over £3K to get this far with the process. However, I am not being disingenuous. I am in a better place because of my diagnosis and the medication.

We have lost about £200K in lost income and drain on our rainy-day money in the last 2 years. Whilst we didn’t plan for me to be out of work for such a long period we have survived, and we are still keeping our heads above water.

I have a healthy income when I’m working, and I drive a [very affordable 7-year-old] white. We have lived below our means for decades. We were working towards building up a pension pot which would allow us to retire a little earlier and have a little comfort when we do. The last 2 years haven’t helped.

We couldn’t survive on £11K per year. But we do have a 16-year-old daughter and she is always our first and last priority. I think we would be able to make ends meet, nothing else, on about £12-13K.

We are approaching the second anniversary of my Mum’s passing. She died on the 1st December 2021. She was 80. It’s been tough. I’ve not been able to grieve because of my own health problems. Recently I’ve been able to raise a smile or two and remembered some happy times with her. Mum left a property and a small amount of cash. Her Will left the property to me and the cash to my sister who has lived abroad, far away for 35 years now. The property wasn’t left to me to sell and acquire the money. It was left to me as Mum trusted me to protect it from my sister. My cousin, who is two years older than me, has resided with Mum for 30 years before she died. Mum treated him like a son. She wanted (wants), and rightly so, his home to remain there for him. She suggested he pay a small amount of rent each month which should go into our daughters JISA. So, and I am not complaining, hell no, I get nothing. I have no truck with this as what my Mum had was hers. She worked hard and like many of us she made ends meet. She was shrewd with her money and despite having so little was a generous person. As we anticipated my sister (think Mrs Greedy) isn’t happy with this and has solicitors acting for her. I’ve spent the last month preparing documents to carry out my Mum’s wishes. It’s my cousin’s home. It’s not an opportunity for me to “smash and grab” and get my hands on £90K. It has been a worry for the last 2 years, made worse by my ill health. We are coming to the end of the turmoil I hope. We genuinely could have “done without this”. But, with the correct diagnosis and me new medication, I’m able to give my Mum’s wishes my very best attention. I hope it’s enough and I hope we are able to protect her kindness towards my cousin. It's important to us. In fairness it's far more important than that.

Thank you for listening. Sorry to impose some slightly off-topic bits on the thread. My Mum spent a life time living below her means. She struggled. She was a consummate "living below your means" person. She would genuinely have been on the gold medal podium. She managed to live on about £12K per year, although her income was slightly more than that. She was generous to a fault, kind and [obviously] is missed. The "irritation" regarding her Will will go away soon. It’s sad that her daughter cannot accept Mum’s wishes though. When it ends we'll pop round to collect my cousin and take him out for a little pub meal. He lives alone, with my Mum's 5-year-old dog. We went down to Nottingham to collect her when she was four months old. A gift for Mum's birthday. I collect her every day and she spends the day, yapping , with me and our two dogs. As you would expect from a Yorky she window guards vehemently. Thanks Mum

Take care Fools

AiY(D)
[Continuing with] LBYM & [now] Happy

[SalvorHardin]

okay I rarely go to the cinema having been banned from my local .

Surely that revelation can't sneak by without explanation. Throwing popcorn, eating noisily, snoring or something worse perhaps

They refused to let me take my motorbike helmet into the cinema, arguing that it would be a "health and safety risk" and a "trip hazard". This was at a 1.30pm showing of the first "Guardians of the Galaxy" film on a Tuesday afternoon where I was the fifth ticket sold in a cinema with at least 400 seats and it was almost 1.30pm. Two of the tickets had been sold to women who had extremely large handbags (larger than my helmet).

They were quite happy to let me buy a ticket and my usual hot dog and large drink (at the time I averaged about 40 visits to the cinema a year (the joys of retirement)). But having done so some jobsworth refused to let me in and also refused to give me a refund for my ticket, arguing that I should have read their T&Cs.

I found out a few days later that some cinemas had recently decided that motorcyclists were a "health and safety risk" (as if we're all members of "Sons of Anarchy"). Friends said that my ban would vanish within a year because of the rapid turnover of staff at the cinema, but as a point of principle I refuse to go there (I now go to a cinema in another town about 10 miles away).

[Tedx]

Now if you'd said you'd self identified as a motorcyclist and that a crash helmet was an essential part of that self identification you could have had the bastard for infringing on your right to self identify.

[AsleepInYorkshire]

£14k doesn't sound much to live on but if I were working, paying rent or a mortgage, funding an essential car loan and paying commuting costs I guess I'd need a job paying £40k gross to have a similar level of disposable income.

I think this is a key point regarding discussions like this, and it's worth remembering that the stage of life where many people might start to consider stepping away from their working life is very likely to be aligned with a time where things like mortgages have been paid off, and the removal of that demand along with other regular work-based costs can make quite a difference in spending-requirements when looking to calculate what we might actually be able to get by on...

My good lady is 6 years younger than I am. If I retire when I am 67, she will still have 6 years work left. We had tried to factor in to our plans for her to retire slightly early and me to retire slightly later. Our perception of retirement isn't to sit and watch repeats of the 1984 cricket . I'd add that we aren't the sort that need a 6-month cruise including water skiing to float our boat .

I think you have raised an important point. As costs reduce, with little or no mortgage, perhaps an older car with no PCP (which in a two-car family can amount to another bloody mortgage ), and no excessive demands on the purse strings "we" can start to plan for retirement. Some may be living in a larger house and want to move to something smaller, to reduce costs even further. Plus some of us are fed up mowing lawns

Pension planning is [Captain Obvious] something that needs to be tailored to individual circumstances[/Captain Obvious} but there's still a common theme that runs through it. And yes it does start when the pressures to maximise earnings begin to fall.

My plans for retirement have been ripped up. I'm reviewing more of a phased retirement. For example I can work say four days a week and have a longer weekend. I can work at home, hopefully with an offering that creates a steady income. As time passes I may want to or be able to reduce my working week to say three days. I think the point I want to make which I hope augments what you have said is that the tailoring of our retirement plans will suit each of us and our circumstances, but as you've said there are common "triggers" which start us thinking about the next part of our journey.

About 5 years ago I did some work for a housing company that built about 2,000 homes a year. The CEO was 71 then and in his own right was a "fairly wealthy" man. I was surprised that he still worked and asked the question of those who knew him "why does he work". The answer I received from all those I asked was the same. He couldn't retire and be at home all day as he didn't get on with his wife that much. Apart from the shock I felt at hearing this and having met him and got to know him a little better with time, I concluded the answer I had been given was probably closer to the truth than I wanted to believe. I felt sad thinking he had all that money and couldn’t enjoy a great retirement with his wife as that option didn't seem to be available. It obviously suited them and worked for them. It was and still is something I struggle to understand. We are all different. And that makes us all the same

I'm looking forward to retirement in whatever form it comes, as long as I have my [very] small family around me I think I will find ways to enjoy the time.

Thank you

AiY(D)

[SalvorHardin]

Now if you'd said you'd self identified as a motorcyclist and that a crash helmet was an essential part of that self identification you could have had the bastard for infringing on your right to self identify.

Alas, it was nine years ago and "The Mandalorian" hadn't been released so wearing helmets wasn't cool back then!

[AsleepInYorkshire]

Surely that revelation can't sneak by without explanation. Throwing popcorn, eating noisily, snoring or something worse perhaps

They refused to let me take my motorbike helmet into the cinema, arguing that it would be a "health and safety risk" and a "trip hazard". This was at a 1.30pm showing of the first "Guardians of the Galaxy" film on a Tuesday afternoon where I was the fifth ticket sold in a cinema with at least 400 seats and it was almost 1.30pm. Two of the tickets had been sold to women who had extremely large handbags (larger than my helmet).

They were quite happy to let me buy a ticket and my usual hot dog and large drink (at the time I averaged about 40 visits to the cinema a year (the joys of retirement)). But having done so some jobsworth refused to let me in and also refused to give me a refund for my ticket, arguing that I should have read their T&Cs.

I found out a few days later that some cinemas had recently decided that motorcyclists were a "health and safety risk" (as if we're all members of "Sons of Anarchy"). Friends said that my ban would vanish within a year because of the rapid turnover of staff at the cinema, but as a point of principle I refuse to go there (I now go to a cinema in another town about 10 miles away).

Hi Salvor,

Hope you're well and perhaps still have your helmet.

My good lady and our daughter love stories. Books, cinema, theatre, and TV. I have no idea if you watch TV or if you have a super-sized deluxe TV already. We have a 65" (curved) TV in our lounge. And before I go further, I need to diversify. If we had the money I think we'd get an 80". Watching some films like Star Wars or The Mandalorian on a large TV is just crazy. I love a good documentary, especially nature and that kind of stuff. Some of the images on our TV are breath taking.

So based solely on my experience of a large TV, which I would never have purchased just for my needs, and having no idea if you already have one, I need to give you some advice, if I may please.

Get one and if you already have one, get a bigger one

And if you have a large TV don't sit too far away from it as the cinema experience is lost

I'm off for a shower, to collect yap yap and do some work.

Take care

AiY(D)

[UncleEbenezer]

okay I rarely go to the cinema having been banned from my local .

Surely that revelation can't sneak by without explanation. Throwing popcorn, eating noisily, snoring or something worse perhaps

I don't go to the cinema unless more-or-less pushed after being traumatised in my 'teens.

The traumatic experience was to sit in an auditorium infested by smokers and feel unable to escape, so I know very well that's no longer a risk, but I think it kind-of took away any taste I might've had for it. I do much enjoy the theatre and concert hall.

[UncleEbenezer]

Now if you'd said you'd self identified as a motorcyclist and that a crash helmet was an essential part of that self identification you could have had the bastard for infringing on your right to self identify.

"Doctor's orders. It's for my medical condition. Your management won't be wanting to get slapped with a Disability Discrimination lawsuit."

[Tedx]

Now if you'd said you'd self identified as a motorcyclist and that a crash helmet was an essential part of that self identification you could have had the bastard for infringing on your right to self identify.

"Doctor's orders. It's for my medical condition. Your management won't be wanting to get slapped with a Disability Discrimination lawsuit."

Yeah, spot on. We have a whole deck of 'it's my right or I'll feel opressed' cards to play with these days.

Which is great if you want to get into wimmin's changing rooms or be the number one 'female' golfer in a fortnight.

[UncleEbenezer]

"Doctor's orders. It's for my medical condition. Your management won't be wanting to get slapped with a Disability Discrimination lawsuit."

Yeah, spot on. We have a whole deck of 'it's my right or I'll feel opressed' cards to play with these days.

Which is great if you want to get into wimmin's changing rooms or be the number one 'female' golfer in a fortnight.

Also has serious uses.

In the early days of Covid we heard:
(a) Older people are at much more risk than younger.
(b) Men are at much more risk than women.

So I decided to identify as a young woman[1]. It worked: when I got covid it was no worse than a regular cold.

[1] Without, I should add, troubling the biological women in their private/reserved spaces.