What is the average amount to retire on?
Discussion
Timmy40 said:
OP, by middle class lifestyle what do you mean?
Apart from quietly getting plastered every night on wine that costs £8 a bottle as opposed to lager for 80p a can ( definitely the behaviour of working class alcoholics ), and driving a second/third hand BMW rather than a second/third hand Ford. And getting the cheapest possible holiday in Crete rather than Corfu, I'm not really sure what defines middle class?
Once the kids have gone/ finished Uni, and the mortgage is paid off, and you aren't going to work I can't see why you'd need the same income as you would mid career.
£80k? I'd say more like £30k for a comfortable pension.
Also I can't understand why retired people are often to be found rattling around in a 5 bed house when the kids are long gone we all start in small 2-3 bed houses or flats and have to trade up as we need room for the kids, so why not trade straight back down when they go?
Likewise the weather is ***t in the UK and it's expensive to live here, so why not just have a small place here and spend most of your time living in cheaper, warmer Southern Europe where the money will go much further.
Middle classes tend to retain the family home as the general family base etc. Apart from quietly getting plastered every night on wine that costs £8 a bottle as opposed to lager for 80p a can ( definitely the behaviour of working class alcoholics ), and driving a second/third hand BMW rather than a second/third hand Ford. And getting the cheapest possible holiday in Crete rather than Corfu, I'm not really sure what defines middle class?
Once the kids have gone/ finished Uni, and the mortgage is paid off, and you aren't going to work I can't see why you'd need the same income as you would mid career.
£80k? I'd say more like £30k for a comfortable pension.
Also I can't understand why retired people are often to be found rattling around in a 5 bed house when the kids are long gone we all start in small 2-3 bed houses or flats and have to trade up as we need room for the kids, so why not trade straight back down when they go?
Likewise the weather is ***t in the UK and it's expensive to live here, so why not just have a small place here and spend most of your time living in cheaper, warmer Southern Europe where the money will go much further.
Pensioners don't often like to go and live abroad as a function of age is to be less adventurous. Most will stay where they know, especially if grand children are in vicinity.
I honestly can't see how £30k per annum could support any kind of middle class lifestyle even remotely.
DonkeyApple said:
I honestly can't see how £30k per annum could support any kind of middle class lifestyle even remotely.
Between two there would be very little tax to pay, so you're looking at getting on for £2.5k a month after tax, with no mortgage, and no kids to pay for, no commuting expenses. This is middle class across the UK we're talking here. Not PH where 'middle class' is defined at being a Co Director on £250k a year with a collection of sports cars and a black book full of hookers and coke dealers.
Timmy40 said:
DonkeyApple said:
I honestly can't see how £30k per annum could support any kind of middle class lifestyle even remotely.
Between two there would be very little tax to pay, so you're looking at getting on for £2.5k a month after tax, with no mortgage, and no kids to pay for, no commuting expenses. This is middle class across the UK we're talking here. Not PH where 'middle class' is defined at being a Co Director on £250k a year with a collection of sports cars and a black book full of hookers and coke dealers.
And talk to most middle class pensioners today and ask them if they have stopped bank rolling their children and most will laugh in your face.
DonkeyApple said:
Indeed, no one is saying that but middle class is band G tax, couple of cars, spending in grand children, traveling to see friends and family, weekends away, club memberships, up keeping the house and eventually needing decorators and gardeners, dining out, couple of holidays.
And talk to most middle class pensioners today and ask them if they have stopped bank rolling their children and most will laugh in your face.
The last one I think is a biggie.And talk to most middle class pensioners today and ask them if they have stopped bank rolling their children and most will laugh in your face.
For the MRs and I we will not have to bankroll any imprudent children, there will only be us two to pay for. We have looked at the likely cost of living as we do now but without the mortgage. To be honest we could still have a very good standard of living on £30kpa between us, granted we would not be able to just spunk £200 on a couple of garden chairs because we like the look of them but there's still enough for a few day trips to France (where the 2Euro a bottle wine will more than cover the cost of the trip vs paying £7-8 for the same in the UK). I think that there are a lot of people who are saving to spend their way through their retirement. I'm not into the idea of planning for when I retire but also spending and enjoying today.
I also certainly do not see my retirement (if I ever get there) as being a zero earned income time of life - there are many little things that I can do to earn a few pennies to add to the pot.
DonkeyApple said:
Indeed, no one is saying that but middle class is band G tax, couple of cars, spending in grand children, traveling to see friends and family, weekends away, club memberships, up keeping the house and eventually needing decorators and gardeners, dining out, couple of holidays.
And talk to most middle class pensioners today and ask them if they have stopped bank rolling their children and most will laugh in your face.
You don't need a couple of cars when you don't need to commute and do the school run, and even if you do they can be minimal cost. You don't need to spend £1k a month on you're Grand Children!, travel to friends and family is much cheaper as you can travel off peak and get a pensioners rail/bus card, weekends away again are much cheaper as you can avoid peak periods, and also you don't have to go on the weekend anymore! Holidays likewise are vastly cheaper when you aren't tied to the school calendar.And talk to most middle class pensioners today and ask them if they have stopped bank rolling their children and most will laugh in your face.
As for the last point if people are stupid enough to do that, it's their decision, but it's entirely optional and not a requirement you should argue is part of pension planning unless you've completely failed to equip your children to deal with life as adults.
DonkeyApple said:
Indeed, no one is saying that but middle class is band G tax, couple of cars, spending in grand children, traveling to see friends and family, weekends away, club memberships, up keeping the house and eventually needing decorators and gardeners, dining out, couple of holidays.
And talk to most middle class pensioners today and ask them if they have stopped bank rolling their children and most will laugh in your face.
Let me turn the question round on you.And talk to most middle class pensioners today and ask them if they have stopped bank rolling their children and most will laugh in your face.
How would you expect the average middle class earner to pay for the above in retirement. I think for most people the assumption would be a middle class earner might earn say £30-£50k (a bit more in London & SE). How would they save and invest to pay for the retirement you're talking about?
oyster said:
DonkeyApple said:
Indeed, no one is saying that but middle class is band G tax, couple of cars, spending in grand children, traveling to see friends and family, weekends away, club memberships, up keeping the house and eventually needing decorators and gardeners, dining out, couple of holidays.
And talk to most middle class pensioners today and ask them if they have stopped bank rolling their children and most will laugh in your face.
Let me turn the question round on you.And talk to most middle class pensioners today and ask them if they have stopped bank rolling their children and most will laugh in your face.
How would you expect the average middle class earner to pay for the above in retirement. I think for most people the assumption would be a middle class earner might earn say £30-£50k (a bit more in London & SE). How would they save and invest to pay for the retirement you're talking about?
Simpo Two said:
I'm not sure you can match class with income. There are impoverished aristocrats and millionaire working class folk.
I think this is where this thread is getting stuck, there is no clear definition of middle class, each person has there own view. So it could require an income from £20k to £200k depending on your viewpoint. Teachers used to be considered middle class, along with Drs and Lawyers. They are the £50-60k earners IMO these people are middle class. They don't have huge amounts of disposable wealth but are better off then most.
Give the 'average' retirement pot is about £50k ( yes that little ), then these people with £30k as a retirement income are well above the average or middle income earners.
Edited to add, to many working in Financial Services in London £50k would be considered a small bonus or a joining handshake, not an annual wage. But that's in the London bubble.
Minimum of at least £1m invested for a couple. That might sound crazy, but a 5% return would only bring in 50k gross, so you may well end up 'dipping in'. You don't want to be running out in your last few years or trying to borrow against your house at that age and inflation doesn't care that you're too old to earn more.
The only way to calculate this is to look @ you're own lifestyle and costs.
Work out what you're actually spending, deduct work expenses (commuting etc) and add in additional costs of hobbies (golf and stuff)
You can be as frugal or extravagant as you like. Despite the dream most people don't go abroad for months on end, grandchildren, elderly parents, involvement with local community, friends, health issues, see to that.
Some couples can be comfortable with a simple lifestyle on £30k p.a. others will need much, much, more.
Work out what you're actually spending, deduct work expenses (commuting etc) and add in additional costs of hobbies (golf and stuff)
You can be as frugal or extravagant as you like. Despite the dream most people don't go abroad for months on end, grandchildren, elderly parents, involvement with local community, friends, health issues, see to that.
Some couples can be comfortable with a simple lifestyle on £30k p.a. others will need much, much, more.
PositronicRay said:
The only way to calculate this is to look @ you're own lifestyle and costs.
Work out what you're actually spending, deduct work expenses (commuting etc) and add in additional costs of hobbies (golf and stuff)
You can be as frugal or extravagant as you like. Despite the dream most people don't go abroad for months on end, grandchildren, elderly parents, involvement with local community, friends, health issues, see to that.
Some couples can be comfortable with a simple lifestyle on £30k p.a. others will need much, much, more.
Exactly. But also not to make the mistake of deducting obvious costs such as mortgage, commute, kids etc and not add in the cost increase of not having a job to take up your time. Work out what you're actually spending, deduct work expenses (commuting etc) and add in additional costs of hobbies (golf and stuff)
You can be as frugal or extravagant as you like. Despite the dream most people don't go abroad for months on end, grandchildren, elderly parents, involvement with local community, friends, health issues, see to that.
Some couples can be comfortable with a simple lifestyle on £30k p.a. others will need much, much, more.
The real issue however, is that the majority of people in the UK have no pension and will have no savings by the time they cease earning due to the cultural shift in massively increased spending and debt financing combined with the cost of housing being artificially inflated and soaking up too much monthly income.
DonkeyApple said:
oyster said:
DonkeyApple said:
Indeed, no one is saying that but middle class is band G tax, couple of cars, spending in grand children, traveling to see friends and family, weekends away, club memberships, up keeping the house and eventually needing decorators and gardeners, dining out, couple of holidays.
And talk to most middle class pensioners today and ask them if they have stopped bank rolling their children and most will laugh in your face.
Let me turn the question round on you.And talk to most middle class pensioners today and ask them if they have stopped bank rolling their children and most will laugh in your face.
How would you expect the average middle class earner to pay for the above in retirement. I think for most people the assumption would be a middle class earner might earn say £30-£50k (a bit more in London & SE). How would they save and invest to pay for the retirement you're talking about?
According to you, per year:
2 sets of school fees - £35k
mortgage on a £0.5m-£1m house - £25k
Couple of nice cars - £10k
Holidays - £5k
That's £75k of post tax income. And then there's other things one may have to buy - like food!
And yet you also believe they need a super size pension pot - maybe £2m. So that's another £30k they put aside each year.
So what you're saying is that a household with an income of around £250k a year is 'middle class'?!
Timmy40 said:
Simpo Two said:
I'm not sure you can match class with income. There are impoverished aristocrats and millionaire working class folk.
I think this is where this thread is getting stuckoyster said:
I see you're in the PH bubble.
According to you, per year:
2 sets of school fees - £35k
mortgage on a £0.5m-£1m house - £25k
Couple of nice cars - £10k
Holidays - £5k
That's £75k of post tax income. And then there's other things one may have to buy - like food!
And yet you also believe they need a super size pension pot - maybe £2m. So that's another £30k they put aside each year.
So what you're saying is that a household with an income of around £250k a year is 'middle class'?!
Nope. I think you've made that up. According to you, per year:
2 sets of school fees - £35k
mortgage on a £0.5m-£1m house - £25k
Couple of nice cars - £10k
Holidays - £5k
That's £75k of post tax income. And then there's other things one may have to buy - like food!
And yet you also believe they need a super size pension pot - maybe £2m. So that's another £30k they put aside each year.
So what you're saying is that a household with an income of around £250k a year is 'middle class'?!
I added school fees as an option. And regionally you can get two done for around £20k anyway.
Pretty sure the typical family home that would be considered middle class would be at least £500k?
And I'm not saying a super sized pension pot but outed a value that would ensure a £50k income without depleting it, ergo being comfortable and not worrying about how long you live.
All quite sensible.
But you are possibly beginning to see the problem of the UK cost of living, lack of suitable pension provisions and the fact that even now debt is being used to support basic lifestyles. It's a big problem facing the younger generations.
Even on a combined professional, household income of £100k it is barely possible to accrue a pension pot of sufficient size to maintain a comfortable, middle class retirement.
oyster said:
DonkeyApple said:
oyster said:
DonkeyApple said:
Indeed, no one is saying that but middle class is band G tax, couple of cars, spending in grand children, traveling to see friends and family, weekends away, club memberships, up keeping the house and eventually needing decorators and gardeners, dining out, couple of holidays.
And talk to most middle class pensioners today and ask them if they have stopped bank rolling their children and most will laugh in your face.
Let me turn the question round on you.And talk to most middle class pensioners today and ask them if they have stopped bank rolling their children and most will laugh in your face.
How would you expect the average middle class earner to pay for the above in retirement. I think for most people the assumption would be a middle class earner might earn say £30-£50k (a bit more in London & SE). How would they save and invest to pay for the retirement you're talking about?
According to you, per year:
2 sets of school fees - £35k
mortgage on a £0.5m-£1m house - £25k
Couple of nice cars - £10k
Holidays - £5k
That's £75k of post tax income. And then there's other things one may have to buy - like food!
And yet you also believe they need a super size pension pot - maybe £2m. So that's another £30k they put aside each year.
So what you're saying is that a household with an income of around £250k a year is 'middle class'?!
Meanwhile in other parts of the country 4-5 bed detached houses can be purchased for less than £300k. in fact in addition to my own I have a couple of new 4 bed town houses that I rent out which cost less than £200k each.
We put 2 kids through private school and uni, so I guess we just fall into the "middle class". ok we scrimpted on holidays and new cars for a few years, but whilst working our joint income never exceeded £60k.
The wife and I retired at 51 and now live very well on a bit more than we used to earn, with kids gone and mortgage paid, no work costs and only one car as a daily driver, although I do have the 993 in the garage if we ever need a second car, we have enough spare to do "things" that take our fancy, help the kids from time to time and induldge our hobbies.
If you want to live in London or the SE you will need far more than other parts of the country.
Edited by oldnbold on Monday 16th March 19:12
Claudia Skies said:
DonkeyApple said:
Even on a combined professional, household income of £100k it is barely possible to accrue a pension pot of sufficient size to maintain a comfortable, middle class retirement.
I'm not convinced you're going to win the sympathy vote with that one! 
The simple fact is that a carefree, middle class retirement, doing all the things that middle class people do and not eroding your savings is going to suggest a household income in the region of £50k and to earn that risk free, taking into account worst case scenarios suggests a savings base in the region of £2m.
quote=DonkeyApple]The simple fact is that a carefree, middle class retirement, doing all the things that middle class people do and not eroding your savings is going to suggest a household income in the region of £50k and to earn that risk free, taking into account worst case scenarios suggests a savings base in the region of £2m.
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Yes, that's very true.
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Yes, that's very true.
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