In the UK we have the government-funded Retirement Living Standards to help guide us in planning for our retirement. They do research each year to show us what retirees can expect to spend, according to three tiers of luxury.
In recent years these figures seem to have grown a lot, to the point that they set an unrealistic target for people to strive for. It can be quite demoralising to hear that you are going to need spending of over £60,000 per year as a couple in order to be "comfortable". Since most people aren't spending anything like this whilst they are still working, where does all the extra come from?
When I looked at the "basket of goods" which is used, it was quickly apparent that some of the spending assumptions aren't at all correct for me. But we're all different. Perhaps some people are indeed spending £1000 a year on clothes and £1200 a year on "food for others". And this is at the "moderate" level, not the "comfortable" one.
I'm going to take the RLS categories of spending and adapt them for what I think is a reasonable benchmark - a £16k retirement. That's £16k spending per person, whilst living as a couple. Compared to the three RLS categories of minimum, moderate and comfortable, this fits squarely between the first two. You can tell me in the comments whether this feels too basic or if it is in fact quite comfortable.
All figures here are per week, per person. Grocery prices sourced from Aldi.
Food £110pw
Groceries £42pw:
cereal £0.95, milk £0.99, bread £1.49, margarine £1.49 per 8 weeks, jam £0.89 per 8 weeks, coffee £2.49 per 4 weeks, orange juice £1.15, bacon £2.69 per 2 weeks, croissant £1.99 per 2 weeks, yoghurt £1.09, banana £0.16 x 3, eggs £1.75 6pk per 2 weeks, sausages £1.79 6pk per 2 weeks, chocolate biscuits £0.89, nuts and raisins £1.69 per 4 weeks, tea bags £1.39 per 8 weeks, apples £2.75, cream cheese £0.95 per 2 weeks, cake £1.99 per 2 weeks,
oranges £1.89 per 2 weeks, blueberies £1.09 per 2 weeks, onions £0.95 per 8 weeks, spaghetti £0.75 per 4 weeks, carrots £0.79 per 4 weeks, leeks £1.39 per 8 weeks, bread rolls £0.75, squash drink £0.99 per 4 weeks, tuna £0.65 per 2 weeks, mayonnaise £0.95 per 8 weeks, ketchup £3.39 per 8 weeks, lettuce £0.89 per 2 weeks, tomatoes £0.99 per 2 weeks, cucumber £0.89 per 2 weeks, beetroot £0.75 per 2 weeks, lamb mince £5.49 per 4 weeks, flour £1.09 per 4 weeks, mixed herbs £0.59 per 8 weeks, potatoes £1.19 per 2 weeks, tomato puree £0.59 per 4 weeks, frozen peas £1.09 per 4 weeks, frozen sweetcorn £1.49 per 4 weeks, salmon £6.99 per 4 weeks, rice pouch £0.65 x 2, single cream £1.09 per 2 weeks, custard £0.59 per 2 weeks, ham £1.69 per 4 weeks, pickled onions £0.79 per 4 weeks, coleslaw £0.75 per 4 weeks, beef mince £3.09 per 4 weeks, bonognese sauce £1.49 per 4 weeks, baked beans £0.41, cod £3.39 per 4 weeks, cheese £2.79 per 2 weeks, frozen chips £1.99 per 4 weeks, tinned peaches £0.99 per 4 weeks, chicken £6.49 per 2 weeks, curry sauce £1.69 per 2 weeks, mixed peppers £1.69 per 4 weeks, gravy granules £1.09 per 8 weeks, ice cream £2.29 per 2 weeks, soup £0.65 x 3
Eating out £52pw
Pub meal £20 weekly
Coffee and cake £7 twice per week
Breakfast £10 weekly
Dinner with friends at restaurant £35 once per month = £8pw
Takeaway £6pw
Chinese takeaway £12 twice per month
Alcohol at home £10pw
beer 6pk lager £4.99, wine bottle rioja £4.99
Clothing £5pw £260 per year for clothes and footwear
Household £42pw
Water rates £5pw
Council tax £15pw
Household insurances £2pw
Fuel £15pw
Decorating £4
Boiler servicing £1
Household goods £20pw
The RLS go into minute detail such as working out the lifespan of your doorbell. I'm just going to go with their figures on this category!
Household services £4pw
Mobile sim deal £6pm
Broadband £11pm
Personal goods and services £4.40pw
Hand soap £1.39 per 8 weeks
Suncream £2.99 per year
Toilet roll £2.79 per 2 weeks
Shower gel £0.99 per 8 weeks
Razor blades £1.49 per 8 weeks
Shaving foam £0.95 per 8 weeks
Mouthwash £0.89 per 4 weeks
Toothpaste £2.49 per 4 weeks
Floss £0.99 per 4 weeks
Deodorant £1.99 per 4 weeks
Shampoo/conditioner £0.99 per 4 weeks
Hand and body lotion £1.99 per 4 weeks
Health £5.3pw
Glasses £1
Dental checkup £1
Dental work £2
Podiatry £0.6
Paracetamol £0.37
Cold & flu £0.99 per 4 weeks
Germoline £1 per 8 weeks
Motoring £3750 shared = £36pw
Car - 4 year old EV replaced every 4 years £15k, trade-in £3k = £3k per year depreciation
Tyres £150
Insurance £250
MOT £40
Breakdown cover £50
Misc repair £140
Public charging £120
Leisure goods £3pw tv / laptop / printer / ink £3pw - £150pp per year on devices
Leisure services £78pw
Netflix or alternative £2pw
Activities £16pw eg pub quiz / clubs / days out / admissions
Holiday: 1 week cruise £1500 = £29pw
Holiday: 1 week cottage in UK £400 = £8pw
Holiday: Budapest city break 5 days £350 = £7pw
£100 flight + £150accom + food/misc £200 = £350 = £7pw
Holiday: Spa break in UK 3 nights £300 = £6pw
Holiday spending money £500 = £10pw
Total £307.70pw = £16,000
What does this retirement look like? A couple sharing one car, eating out 2-3 times a week, going on 4 trips per year. Does that strike you as "comfortable" whilst keeping an eye on their spending? You could easily expand that spending, with more exotic travel, or not watching the day-to-day spending.
For me this establishes £16k (in terms of 2025 spending power) as the minimum retirement I want to aim for. I'd like more travel. Other than that, I don't think there's any category that I would want to expand.
I previously wrote about how to reach a £16k retirement at State Pension age, for those who haven't pursued early retirement, and this article is intended to partner that one. Want to read more of my ideas? I have a new book out -
Build Your Retirement, 5 ways to improve your wealth in retirement. Or other books
here.
No comments:
Post a Comment
Leave a comment