Donate to Remove ads

Got a credit card? use our Credit Card & Finance Calculators

Thanks to johnstevens77,Anonymous,MyNameIsUrl,6Tricia,staffordian, for Donating to support the site

Retirement Living Standards Report (Oct 2021)

Including Financial Independence and Retiring Early (FIRE)
Itsallaguess
Lemon Half
Posts: 7230
Joined: November 4th, 2016, 1:16 pm
Has thanked: 3273 times
Been thanked: 6482 times

Retirement Living Standards Report (Oct 2021)

#449548

Postby Itsallaguess » October 12th, 2021, 3:19 pm

The Retirement Living Standards Report has been updated today, with some hopefully interesting ideas for the sort of funding-requirements needed to support three broad levels of retirement 'comfort', for both singles and couples -

Retirement Living Standards -

More of us are saving in a workplace pension than ever before. We now have more information, more choices, and more responsibility for our retirement savings.

But will the future we want be the future we are able to get?

The Retirement Living Standards, based on independent research by Loughborough University, have been developed to help us to picture what kind of lifestyle we could have in retirement.

Introducing the Standards -

The standards show you what life in retirement looks like at three different levels, and what a range of common goods and services would cost for each level.

For many people their private and state pensions (full state pension for 2021-22 is £9,339 per year), and other savings could go a long way towards these costs. You may need to add other costs depending on your circumstances, such as mortgage, rent, social care costs and any tax on pension income.

Explore the categories to picture what life in retirement could look like for each of the Standards.


Here's a snapshot showing the three broad funding categories detailed in the report, for both singles and couples -

Image

Source - see report link below

Note that these figures are based on lifestyles outside of London.

The full detailed report can be read here, and I hope it's of interest to readers of this FIRE board -

https://www.retirementlivingstandards.org.uk/

Cheers,

Itsallaguess

TUK020
Lemon Quarter
Posts: 1473
Joined: November 5th, 2016, 7:41 am
Has thanked: 474 times
Been thanked: 847 times

Re: Retirement Living Standards Report (Oct 2021)

#449627

Postby TUK020 » October 12th, 2021, 7:17 pm

are the income figures pre tax?

Lootman
The full Lemon
Posts: 11247
Joined: November 4th, 2016, 3:58 pm
Has thanked: 144 times
Been thanked: 2493 times

Re: Retirement Living Standards Report (Oct 2021)

#449628

Postby Lootman » October 12th, 2021, 7:22 pm

Itsallaguess wrote:Note that these figures are based on lifestyles outside of London.

No kidding. If my wife and I could get away with £94 a week on food (the "comfortable" option for a souple) I would be thrilled. We probably spend three times that, excluding restaurants and takeaways of course.

Howard
Lemon Quarter
Posts: 1762
Joined: November 4th, 2016, 8:26 pm
Has thanked: 613 times
Been thanked: 758 times

Re: Retirement Living Standards Report (Oct 2021)

#449629

Postby Howard » October 12th, 2021, 7:32 pm

Lootman wrote:
Itsallaguess wrote:Note that these figures are based on lifestyles outside of London.

No kidding. If my wife and I could get away with £94 a week on food (the "comfortable" option for a souple) I would be thrilled. We probably spend three times that, excluding restaurants and takeaways of course.


No wonder you are spending so much on food. Most of us could never afford souple. ;)

regards

Howard

Urbandreamer
Lemon Quarter
Posts: 1401
Joined: December 7th, 2016, 9:09 pm
Has thanked: 126 times
Been thanked: 425 times

Re: Retirement Living Standards Report (Oct 2021)

#449656

Postby Urbandreamer » October 12th, 2021, 9:02 pm

Lootman wrote:
Itsallaguess wrote:Note that these figures are based on lifestyles outside of London.

No kidding. If my wife and I could get away with £94 a week on food (the "comfortable" option for a souple) I would be thrilled. We probably spend three times that, excluding restaurants and takeaways of course.


Well it depends upon what you mean by "food" doesn't it. We live "up-north" and our food bill for three people averages as £74pw. I keep a spreadsheet. However that is excluding what we spend upon booze, or cooking it for that matter. Are you sure that the odd bottle of wine doesn't drop into your basket? I know that happens with my shop (I simply have the data to exclude it from the food bill).

My spreadsheets seem to indicate that we could be "comfortable" spending the "moderate" amount each year. But then our "comfort" doesn't depend upon changing the kitchen and bathroom every 10-15 years, replacing the car every five years and flying to Europe for three weeks each year. Why should we start doing these things when we haven't felt any desire to so far. It could be said that those savings might add up to quite a few bottles of wine!

Oh BTW TUC020, the figures are not "income" to be pre or post tax, but expenses. Everyone's tax situation will be different. I am going to try and ensure that I pay no tax for at least the first 5 years of retirement by limiting my taxable income, without limiting my actual income.

Lootman
The full Lemon
Posts: 11247
Joined: November 4th, 2016, 3:58 pm
Has thanked: 144 times
Been thanked: 2493 times

Re: Retirement Living Standards Report (Oct 2021)

#449659

Postby Lootman » October 12th, 2021, 9:09 pm

Urbandreamer wrote:
Lootman wrote:
Itsallaguess wrote:Note that these figures are based on lifestyles outside of London.

No kidding. If my wife and I could get away with £94 a week on food (the "comfortable" option for a couple) I would be thrilled. We probably spend three times that, excluding restaurants and takeaways of course.

Well it depends upon what you mean by "food" doesn't it. We live "up-north" and our food bill for three people averages as £74pw. I keep a spreadsheet. However that is excluding what we spend upon booze, or cooking it for that matter. Are you sure that the odd bottle of wine doesn't drop into your basket? I know that happens with my shop (I simply have the data to exclude it from the food bill).

Fair point. Although my main booze purchases are distinct from the regular food shop. I do supplement that with purchases from Waitrose, M&S and Budgen, plus the odd offie when things are desperate.

To be fair i don't keep a spreadsheet and was just relying on credit card statements for my guesstimate. Even so it is easily £100 a week just on meat and seafood.

Urbandreamer
Lemon Quarter
Posts: 1401
Joined: December 7th, 2016, 9:09 pm
Has thanked: 126 times
Been thanked: 425 times

Re: Retirement Living Standards Report (Oct 2021)

#449676

Postby Urbandreamer » October 12th, 2021, 9:48 pm

Lootman wrote:[To be fair i don't keep a spreadsheet and was just relying on credit card statements for my guesstimate. Even so it is easily £100 a week just on meat and seafood.


In the spirit of honesty, if I was simply going off the statement of what was paid to supermarkets it would be £134pw. I do however buy clothing, dehumidifiers etc from Aldi. I believe that they are currently selling gaming computers online. It would turn up as Aldi on a credit card bill.

I should also admit that my spreadsheet didn't include the hunch of wild boar, professional hunted in Europe and delivered for Christmas, as food. We all like the odd luxury.

I suspect that if you were to simply download your credit card statements and feed them into a spreadsheet (or even your current account) you could have a great idea of what you currently spend*. You would have to adjust for the costs of working and the costs of hobbies you might do in retirement, but it's a good starting point for how much you will spend when you retire. It's helps form my estimate. This investigation/report is another.

*You can't distinguish food from anything else that Aldi etc sell, but you can see the Amazon or investment habit etc.

vagrantbrain
Lemon Slice
Posts: 309
Joined: November 17th, 2016, 7:12 pm
Has thanked: 107 times
Been thanked: 145 times

Re: Retirement Living Standards Report (Oct 2021)

#449716

Postby vagrantbrain » October 13th, 2021, 12:19 am

I saw this on the BBC today and was taken aback that £33k is considered `comfortable` for a single person. Given its higher than the average salary, and at period in life where the big outgoings of the mortgage, retirement savings and young kids have all gone it seemed to be somewhat high to me.

mickeypops
2 Lemon pips
Posts: 185
Joined: November 4th, 2016, 2:10 pm
Has thanked: 108 times
Been thanked: 179 times

Re: Retirement Living Standards Report (Oct 2021)

#449718

Postby mickeypops » October 13th, 2021, 12:29 am

I’m guessing this assumes a paid off mortgage?

Kantwebefriends
2 Lemon pips
Posts: 176
Joined: November 5th, 2016, 4:02 pm
Has thanked: 6 times
Been thanked: 31 times

Re: Retirement Living Standards Report (Oct 2021)

#449723

Postby Kantwebefriends » October 13th, 2021, 2:23 am

For the comfortable couple the expenditures on cars and clothes are both absurdly high. If they get through a couple of bottles of £10 wine a week the expenditure on food and drink is too low. The birthday present money looks too small and there's no mention of Xmas presents.

In short, the numbers are daft.

Dod101
Lemon Half
Posts: 9528
Joined: October 10th, 2017, 11:33 am
Has thanked: 2227 times
Been thanked: 4217 times

Re: Retirement Living Standards Report (Oct 2021)

#449740

Postby Dod101 » October 13th, 2021, 8:29 am

As a single I think that the income shown for comfortable is quite realistic. The £33,000 is about what I spend but I spend far more on gifts and charity within that figure than the £50 birthday presents shown. I do not though replace my kitchen or bathrooms every 10/15 years and if I did it would paid for them from capital anyway.

I spend large amounts on heating and lighting (I do not know why) and a lot more on food and drink than £59 per week.

Anyway the details of expenditure are quite personal; to me the main thing is that the top line figure is realistic I think.

Dod

Allitnil
Posts: 46
Joined: February 6th, 2021, 3:13 pm
Has thanked: 39 times
Been thanked: 20 times

Re: Retirement Living Standards Report (Oct 2021)

#449743

Postby Allitnil » October 13th, 2021, 8:41 am

TUK020 wrote:are the income figures pre tax?

They are expenditure figures, so post-tax.

Kantwebefriends wrote:For the comfortable couple the expenditures on cars and clothes are both absurdly high. If they get through a couple of bottles of £10 wine a week the expenditure on food and drink is too low. The birthday present money looks too small and there's no mention of Xmas presents.

In short, the numbers are daft.

The figures will look daft for everyone taken in isolation. The question is how indicative are they when averaged over a large enough sample? For example, there are plenty of people who don't, or rarely, drink alcohol so for them the figure is too high.

The website has links to the detailed data (albeit for the 2019 study) and that states the gifts are 12 x £50 each for both birthdays & Christmas for a "comfortable" couple.

FWIW, my wife & I would probably struggle to spend as much as the "comfortable" couple apparently requires. Adjusting for inflation (*) and even including a rather significant one-off set of work on the house, we've been averaging only £36,000 per year since I started keeping records in 2002.

* adjusted using CPI although our personal rate of inflation has been well below CPI.

1nvest
Lemon Quarter
Posts: 1562
Joined: May 31st, 2019, 7:55 pm
Has thanked: 192 times
Been thanked: 416 times

Re: Retirement Living Standards Report (Oct 2021)

#449773

Postby 1nvest » October 13th, 2021, 11:06 am

Dod101 wrote:As a single I think that the income shown for comfortable is quite realistic. The £33,000 is about what I spend but I spend far more on gifts and charity within that figure than the £50 birthday presents shown. I do not though replace my kitchen or bathrooms every 10/15 years and if I did it would paid for them from capital anyway.

I spend large amounts on heating and lighting (I do not know why) and a lot more on food and drink than £59 per week.

Anyway the details of expenditure are quite personal; to me the main thing is that the top line figure is realistic I think.

Dod

I also agree that the top line figures look realistic to me.

A single person with £9K state pension, £15K occupational pension, £22K net with no additional savings is 'OK' (moderate). £250K of savings/investments in addition to that with a 5% potentially tax efficient inflation adjusted income production (25 year SWR invested in a third each gilts/gold/stocks) adding £12.5K to that, £35K/year total and comfortable. If a very bad case SWR outcome and all of savings are spent after 25 years for a 65 year old start date retiree then at 90 with the state and occupational pensions along with the house being sold to fund care home costs - still comfortable excepting if care needs are incredibly high/intense/expensive.

Seems to me that many hereabouts in retirement are more than comfortable and the younger/working/accumulating are well on course towards a comfortable future :)

monabri
Lemon Half
Posts: 5500
Joined: January 7th, 2017, 9:56 am
Has thanked: 773 times
Been thanked: 1958 times

Re: Retirement Living Standards Report (Oct 2021)

#449796

Postby monabri » October 13th, 2021, 12:20 pm

It is perhaps worthwhile downloading the spreadsheets and having a play with the numbers. The first thing I did was to multiply the total weekly cost by 52 to arrive at an annual expenditure. I then sorted the tables out on each worksheet by "weekly cost" from high to low and then started to tweak the values to more realistic for our lifestyle.

I prefer not to divulge the result for personal reasons other than I found that I was adjusting the numbers downwards (one reason, we are both vegetarian and so don't eat meat which seems quite expensive relative to other foods).

AWOL
Lemon Slice
Posts: 287
Joined: October 20th, 2020, 5:08 pm
Has thanked: 184 times
Been thanked: 120 times

Re: Retirement Living Standards Report (Oct 2021)

#449844

Postby AWOL » October 13th, 2021, 3:13 pm

vagrantbrain wrote:I saw this on the BBC today and was taken aback that £33k is considered `comfortable` for a single person. Given its higher than the average salary, and at period in life where the big outgoings of the mortgage, retirement savings and young kids have all gone it seemed to be somewhat high to me.


I don't believe the meaning of comfortable here is the opposite of uncomfortable, I believe it is "comfortably off" and perhaps relates to maintaining a similar lifestyle to what many middle class people had while working. Hence it is a little higher than the £30k median earnings in 2021 and higher than their middle ground retirement option which they call moderate. The minimum level would be uncomfortable for most people and probably uncomfortable some of the time for everyone living at that level.

I think the levels are reasonable and are a guide as we don't all live average lives. Some people spend a lot on gifts, other give a significant amounts to their church (e.g. 10% for Mormons), others eat out most days, etc. I always spent little on clothes but a lot on holidays.

I find myself living a moderate life style but cars and household maintenance could push the average annual spend to the comfortable level. Many people ignore the effect of exceptional purchases on their long term average spending. Looked at as a couple we are definitely in the comfortable band.

Wuffle
Lemon Slice
Posts: 291
Joined: November 20th, 2016, 8:14 am
Been thanked: 108 times

Re: Retirement Living Standards Report (Oct 2021)

#449895

Postby Wuffle » October 13th, 2021, 5:53 pm

The reality check is that staying alive in a modern society has a cost.
For reasons that don't need airing here, I pretty much shut down for a couple of years and it costs me about 8k a year to exist.
Lowest council tax band, northern town, a base figure.
So I would have 3k disposable.
Moderate is 4 times that in disposable and comfortable is 8 times.
That is the real difference.
The language used, minimum, moderate and comfortable disguises the step changes.

W.

JohnnyCyclops
Lemon Slice
Posts: 275
Joined: November 15th, 2016, 9:19 pm
Has thanked: 161 times
Been thanked: 87 times

Re: Retirement Living Standards Report (Oct 2021)

#449980

Postby JohnnyCyclops » October 13th, 2021, 10:43 pm

mickeypops wrote:I’m guessing this assumes a paid off mortgage?


Yes. And doesn't allow for renters in retirement.

kempiejon
Lemon Quarter
Posts: 2074
Joined: November 5th, 2016, 10:30 am
Been thanked: 607 times

Re: Retirement Living Standards Report (Oct 2021)

#449983

Postby kempiejon » October 13th, 2021, 10:48 pm

JohnnyCyclops wrote:
mickeypops wrote:I’m guessing this assumes a paid off mortgage?


Yes. And doesn't allow for renters in retirement.

I clicked through to look at some of the details like
For many people their private and state pensions (full state pension for 2021-22 is £9,339 per year), and other savings could go a long way towards these costs. You may need to add other costs depending on your circumstances, such as mortgage, rent, social care costs and any tax on pension income.


I suppose for the general it's a starting point but for the specific it'll take some tweaking.

JohnnyCyclops
Lemon Slice
Posts: 275
Joined: November 15th, 2016, 9:19 pm
Has thanked: 161 times
Been thanked: 87 times

Re: Retirement Living Standards Report (Oct 2021)

#449985

Postby JohnnyCyclops » October 13th, 2021, 10:51 pm

I took it as a general guide to the types of expenses people need to consider, and a nudge towards people (pre-retirement) doing what other posters seem to, which is take a look through current expenditure as a possible guide for the future. No bad thing and a useful, simplified approach. Sure, there's swings and roundabouts, but it's the process that's important not trying to fit inside one of the three examples.

Because we run all household costs through a joint current account held just for that purpose, we've been able to track outgoings. It means we have ten years worth of data that is the basis of retirement expense planning (groceries, utilities, car running, household items, insurances, etc.). To that we can add holidays, car purchase, personal costs (clothing, shoes, haircuts, etc.) and entertainment/eating out/trips. That's then the basis of our target retirement income.

AWOL
Lemon Slice
Posts: 287
Joined: October 20th, 2020, 5:08 pm
Has thanked: 184 times
Been thanked: 120 times

Re: Retirement Living Standards Report (Oct 2021)

#450042

Postby AWOL » October 14th, 2021, 10:27 am

Personally I think this is invaluable for people who are overwhelmed by the idea of working it out for themselves or because they aren't there yet keep deferring the task. It's also a useful rough guide for those wanting to validate their modelling and assumptions as it gives reassurance that your more modest income in retirement that most of us have will indeed support the lifestyle that you expect. It is also good because it gets people to think in terms of "earnings" in the sense of "take home pay" which is an essential step in retirement planning. Most of us have much less pre-tax income than when working but due to no longer saving for retirement and tax efficiencies have less of a difference in after tax income.

I know when I did my own modelling I was surprised at the conclusions of how little it takes to sustain a decent life (compared to pre-retirement income). I went from thinking" I couldn't possibly retire until 18 years from now" to "why on earth wouldn't I!". Having the retirement living standards gave me independent reassurance that my modelling was sensible. Of course we all have to look at where our circumstances differ (for example I have dependent children still but I do not spend money on personal grooming, no scents, no barbers, nothing except soap and shampoo).

I am really glad this resource exists.

Regarding housing, as only a small minority of pensioners have a mortgage I think it's quite reasonable to make that assumption and for the minority to have to adjust their required income.


Return to “Retirement Investing (inc FIRE)”

Who is online

Users browsing this forum: No registered users and 4 guests