Right then. Let's get stuck into something that's probably on all our minds at some point
retirement planning. Specifically, we're going to have a look at what it takes to retire
comfortably here in the UK. We've got this pretty interesting YouTube video, it's from
Time to Retire, and it's a couple, and they're reacting to the latest retirement living standards
report.
Yes, you have seen this one.
You know the one from the Pensions and Lifetime Savings Association?
Yeah, it's certainly got people talking.
It did, and that's exactly what we're doing today.
So we're going to unpack these figures. Some of them are a bit eye-watering, to be honest.
And we'll see how they stack up against different retirement lifestyles. So, you know, comfortable,
moderate and minimum.
Okay, so why don't we start with comfortable then?
The report suggests that a couple needs around 59,000 pounds a year after tax.
Wow.
Do you see the couple's faces when that figure popped up?
Oh, blimey, they were gobsmacked.
Yeah.
I don't blame them, really. That's a hefty sum. It really highlights how important it
is to plan ahead, though, doesn't it?
Absolutely. It's not just about saving enough. It's about understanding where that money
needs to go.
So this report actually breaks down the budget into different categories.
So for example, it allocates 80 pounds a week for groceries, 30 pounds for eating out, and
then a bit extra for those cheeky takeaways.
The couple had something to say about that, didn't they?
Oh, yeah. What do they think?
A takeaway these days can easily set you back more than 30 quid?
Yeah, especially if you're treating yourself to a nice Indian or a Chinese.
Exactly.
The comfortable label starts to feel a bit optimistic when you consider the actual cost.
And that's just the food.
What about getting around transport?
Well, for transport, the report factors in replacing a small car every five years.
Plus some money for taxis and train travel. Sounds reasonable enough on the surface, I
guess.
It does. But the couple did point out that this assumes you're still driving.
Oh, yeah, of course.
What about when you reach the age for free bus passes?
Well, let's be honest, in retirement, you might fancy more than a trip to the seaside.
Exactly. You might have some big travel plans.
Exactly.
You know, a European adventure or maybe even a cruise.
That's it.
And that's where that comfortable budget might start to feel a bit stretched.
Yeah, exactly.
Indeed. What did the report have to say about holidays?
Well, it allows for one two-week holiday abroad to a four-star Mediterranean resort.
All right.
And then three long weekend breaks within the UK.
That was nice, but perhaps not quite as extravagant as some might envision for a comfortable retirement.
The couple seemed to think it was a bit stingy on that front.
Really?
Given that 59,000-pound figure.
Yeah, that's true.
And then there's clothing. They suggest 1,500 pounds per person per year.
Three grand on clothes?
Yeah.
Did the couple agree with that?
Not a chance.
What did they say?
They reckon that a good quality coat or a decent pair of shoes should last you a good
few years.
Yeah, makes sense.
They're advocating for a bit more mindful spending, even in a comfortable retirement.
Makes sense.
What about helping out family? Because that can be a big expense, especially as we get
older.
Yeah, for sure.
What did they say about that?
The report recommends putting aside 1,000 pounds a year for things like gifts to nations
and helping out family members.
The couple felt that was a bit high.
Did they?
Especially since they don't have any grandkids yet.
Oh, right.
But that's a whole other kettle of fish, isn't it?
It is.
Grandchildren can be wonderful, but they don't come cheap.
Absolutely.
So we've seen what comfortable looks like.
Right.
Now let's brace ourselves and take a peek at the minimum retirement budget.
Okay.
Quite a contrast.
I'm ready.
Hold on to your hats because for a single person, the minimum retirement income is a
mere 14,400 pounds a year.
Oh, wow.
That's barely above the state pension.
Blimey, that comfortable label feels a world away suddenly.
How are you supposed to enjoy retirement on 14,400 pounds a year?
It does make you wonder, doesn't it?
Let's have a look at how that actually breaks down.
Okay.
So for home maintenance, the report allocates a grand total of 100 pounds a year.
100 pounds.
You wouldn't even be able to fix a leaky tap with that.
A couple had a good chuckle about that one.
I bet they did.
What about putting food on the table?
Right.
So the food budget is tight.
Right.
50 pounds a week for groceries.
Okay.
50 pounds a month to eat out.
All right.
And a measly 15 pounds for takeaways every two weeks.
Wow.
You'd have to be pretty careful with your pennies to make that last.
You'd certainly have to be making the most of those supermarket deals.
Yeah, for sure.
It makes you question how realistic these standards are for many people.
Absolutely.
And then there's getting around.
So no car, infrequent taxis and very limited train travel.
Right.
A couple were pretty skeptical about that one.
Yeah.
Especially if you live somewhere without decent public transport.
It does seem limiting.
What about holidays?
Can you escape on a minimum budget?
Well, you get one week's holiday in the UK.
The couple joked about a coach trip to Skagnes.
Oh, right.
Not quite the dream retirement, eh?
It really highlights the stark difference between these levels.
It does.
You know, we've gone from four star resorts in the med to a coach trip to Skagnes.
It's a world of difference.
It is.
We've always raised questions about what a decent standard of living actually means
in retirement.
It does indeed.
We'll delve into that a bit more in a moment.
But first we should touch on the moderate level.
Which sits somewhere between these two extremes.
So the moderate retirement income for a single person is 31,300 pounds per year.
So more than double the minimum.
But still quite a jump from that comfortable 59,000 for a couple.
Interesting.
How does moderate level get you?
Well, you get a bit more flexibility than the minimum.
But the increases in some areas are a bit underwhelming.
Like what?
Like you only get an extra five or a week for groceries.
That's not exactly going to revolutionize your weekly shop, is it?
Not really, no.
What about holidays, any chance of some sunshine?
You do get a two week all-inclusive in the med.
Oh, right.
But only at a three star resort.
Okay.
A slight step up from Skagnes.
But not exactly luxury.
It seems like moderate is still about making choices and being mindful of your budget.
Absolutely.
Okay.
One point that the couple raised, which I thought was quite interesting actually, is
the difference in costs between retiring single and retiring as a couple.
You might assume that a couple just needs double the money a single person needs.
That seems logical.
Yeah.
Is that how it works out though?
Not quite.
The minimum retirement budget for a couple is actually less than double the single person's
minimum.
Interesting.
I would suggest that there are some economies of scale involved.
That makes sense.
Sharing costs can make a big difference even in retirement.
Yeah.
It's something to consider, isn't it?
Yeah, it is.
So as we kind of wrap up this part of our deep dive.
Right.
What were the couple's overall thoughts on this report?
Were they convinced?
Well, they were a bit skeptical, to be honest.
Okay.
Especially about that high figure for comfortable living.
Right.
They felt it was a bit out of touch with most people's financial realities.
Understandable.
And they did encourage viewers to share their own experiences and thoughts as well.
A sensible suggestion after all these are just guidelines and everyone's situation is different.
Exactly.
We've looked at the numbers, heard the couple's reactions.
Yeah.
And started to unpack what comfortable retirement really means in the UK.
Right.
But there's more to come.
Indeed.
In part two, we'll explore some of the factors that influence retirement planning.
Okay.
Let's dive a bit deeper into how to make your savings last.
Sounds good.
So stick with us.
Ah.
And we're back.
Welcome back.
We've just scratched the surface of retirement planning.
Yeah.
It's not just about the numbers, is it?
Not at all.
There are loads of things that can affect how much you need.
Right.
Like your health, for one.
Yeah.
If you have any ongoing health issues, you might need to think about private healthcare
or extra support.
Yeah.
It's in CERI.
Yeah.
Which can all add up.
And then there's the cost of living.
Yeah.
It's a bit of a wild card, isn't it?
Everything seems to be going up these days.
It certainly is.
That's where inflation comes in.
Right.
And it can really eat away at your savings over time.
Yeah.
So it's vital to factor that into your plans.
Gives you a bit of a fright, doesn't it?
It does.
What can we do to make sure our retirement savings actually last?
What's the secret sauce?
Well one key thing is diversification.
Okay.
Don't put all your eggs in one basket as the saying goes.
Spread your investments across different areas.
Spread the risk.
Exactly.
I like that.
So what are we talking about here?
Things like pensions, of course.
Okay.
Most of us have those through work.
Right.
But you might want to think about additional private pensions too.
Okay.
So there aren't ISAs, individual savings accounts.
These have tax advantages.
So they can be a good way to save for retirement.
And some people even invest in property.
Now those sound a bit complicated for someone who's not a financial whiz.
Are there any simple ways to make your money stretch further?
Downsizing your home is a popular option.
If you've got a big house with spare rooms, you could sell up, move somewhere smaller,
and release some equity.
Unless your bills will probably be lower too.
Makes sense.
Yeah.
And let's not forget all those perks you get when you reach a certain age.
Absolutely.
Your free bus pass, cheaper prescriptions, those sorts of things.
They can make a real difference.
Every little helps.
Exactly.
Now one thing the video didn't really touch on is the emotional side of retirement.
Right.
It's not just about the money, is it?
No, it's not.
It's a massive change in your life.
You're absolutely right.
It's important to think about how you'll spend your time.
Right.
How you'll stay connected with people and how you'll find things that give you purpose.
So it's as much about life planning as it is about financial planning.
Exactly.
And that's often the bit people forget about.
You've worked hard all your life and suddenly you've got all this time on your hands.
It can be a bit daunting.
It's important to have things to look forward to, isn't it?
Hobbies travel, spending time with loved ones.
Absolutely.
And that's where planning comes in.
Yeah.
What you want your retirement to look like.
What are your dreams?
It's about having a vision, isn't it?
And then figuring out how to make that vision a reality.
Precisely.
And that brings us back to those figures in the retirement living standards report.
They caused quite a stir, didn't they?
They did.
The couple in the video seemed pretty skeptical.
Right.
Particularly about that high figure for a comfortable retirement.
It is a lot of money.
Do you think these reports are helpful?
Or are they just scaremongering?
That's a great question.
They can be a useful starting point.
They can be a useful starting point, but it's crucial to remember that they're just guidelines.
They can't possibly account for everyone's individual circumstances.
Exactly what one person finds comfortable, another might find extravagant or even restrictive.
It all comes down to what you value and what you want out of your retirement years.
So if someone's listening to this thinking, blimey, I need to find 59,000 pounds a year,
what would you say to them?
I'd say take a deep breath and don't panic.
Those figures are based on a very specific set of assumptions.
The key is to personalize it to your own situation.
Think about what's important to you.
Make it your own retirement plan, not someone else's.
Precisely if travel is your passion, you might be willing to cut back in other areas to fund
those adventures.
If you're more of a homebody, you might prioritize creating a comfortable and cozy living space.
It's all about finding that balance, isn't it?
Absolutely.
And it's never too early to start thinking about these things.
The earlier you start planning and saving, the more options you'll have down the line.
Even if retirement feels like a million miles away.
Especially that that's when the magic of compound interest really kicks in.
All regular contributions over time can grow into a pretty substantial nest egg.
So don't be put off by those big numbers.
Start small.
Do your research.
Maybe chat with a financial advisor.
And focus on building a plan that works for you.
And remember, retirement isn't just about the financial side of things.
It's about creating a fulfilling and meaningful next chapter.
It's about enjoying the fruits of your labor and pursuing those passions you may have put
on hold.
It's about having time to do the things you love.
Whether that's traveling the world, spending time with family and friends, or finally taking
up that hobby you've always fancied.
Exactly.
Retirement can be a time of great joy and freedom.
It's all about planning and making informed choices.
Well said.
That brings us to the end of our deep dive into retirement planning.
It does.
Hopefully we've given you some food for thought.
And maybe even a bit of inspiration to start planning your own retirement adventure.
We've covered a lot of ground exploring the numbers, the realities, and most importantly
the possibilities.
Right.
Remember, it's your retirement, so make it your own.
Couldn't agree more.
Thanks for joining us on this deep dive.
Until next time.