Average UK Retiree Income - How do you compare?

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What is it like to be an average UK retiree? 🤔

You're about to find out!

TIMECODES
0:00 - Average UK retiree income
0:29 - Planning for averages
2:02 - Government Pension Income Series
4:12 - IFS - Understanding Retirement in the UK
6:48 - A VERY rough cash flow plan
10:48 - The PERSPECTIVE that is key

RESOURCES

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[DeeCee-nbev]

Try working out the figures for singles and couples who are on the minimum wage, the living wage and the average wage. These would give a better indication of what the vast majority of the population get as retirees rather than the average.

[johnawara]

Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got talking about investment and money. I started investing with $120k and in the first 2 months, my portfolio was reading $274, 800. Crazy right!, I decided to reinvest my profit and gets more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family.

[stewartburnett]

Always a lot more complex in practice. I "retired" at 56 with a DB pension which covers ~45% of monthly spending requirements, at 60 I'll have another DB (now covering 60% of spending requirements) and in the mean time I'm topping up from a DC pension pot till I get to 67 and receive the full state pension. I'm keeping some DC in reserve and kept some lump sum back for bucket list holidays - the lump sum monies are earning tax free dividend income in my ISA

[porschecarrerascabriole]

Going to 100 years old in voyant scares people that they need funds till then. That’s wrong as people at this old age will need very little money anyway and the state pension will suffice. I plan up to middle 80s and if I manage beyond that age i will be on state pension

[kevak]

Their idea of moderate must be vastly different to mine. £43k/year for 'moderate' retirement for a couple??? £25.5k taxfree, 20% tax on £17.5k = £3.5k so take home of £39.5k or £3, 300/month - that's excluding any UFPLS drawdown for more tax breaks. Thats roughly the same as £52k/year for a single salary with no pension payments, NI, commuting costs etc, and (presumably) no mortgage. Food and bills, say, £1300/month leaving 2 grand a month to just spend. Even bills of £1, 800 still leaves £1, 500/month spending money.

[roblowry]

A really interesting video. I'm not a fan of the PLSA living standards figures - they jumped over 20% from 2023 to 2024 and as funded by organisations with an interest in increasing the amount you put away as investments, I wonder if they are guilty of fear-mongering. Thanks for giving a broader view. I look forward to what the Which? figures will be when they update them this year.

[Dailypalamides]

We retired with 350k at 62. We are 65. KEY is low expenses which are somewhat regulated. We do not pay for: Water, homeowners insurance, Trash nor any health costs beyond Part B (due to qualifying for Medicaid if needed) No debt, Prop Tax is $330 a mo. here in Northern Calif on the outskirts of a world class ski town called Truckee, CA. Groceries are $1250, Clothing/Hair- $200. Donation $350, Tech/Cell-$200, Transportation- E-Car, E-Bikes & home powered by DIY Solar about 7 months a year.- $800, Utilities- $250, Repairs- $250, Unexpected costs, Travel $200, Chickens $50= $2125 per month haha. Live in a 750 sq foot home on 3 acres w/ a 650 ft barn. We raise chickens for eggs but the compost pile is their main source of food along with fodder we grow. We grow sprouts in jars which is 1/3 of our vegetables. 8 fruit trees. We can/preserve food. Travel-camping 3 weekends a year in our older RV. We enjoy church, bible study, cycling and volunteering. We ride w/ a bike club 3-4x a mo. about 1/2 the yr. Coffee out 1x a week w.friends. Occasional dinner in or out with friends. A Great Life! Expenses are about $3000+ and our Income is $4500. We usually have about $250 leftover each month. At 70, we'll start taking $12k a year out of the IRA. We have newer most everything so nothing will go out anytime soon. Emergency cash fund = 20k. Credits to my FA Dianne Sarah Olson. Life is good

[chrislines-actorandvoicear]

I think you should show us median retirement income, not the average. Take out the top and bottom 10, 000 people and see what that does to incomes!

[thinking]

Those figures all seemed meaningless to me. Household size, location, lifestyle is so variable that what others have and do with their money makes all the difference. Neighbours opposite are retired, and runs a brand new luxury SUV that they change every 2 or 3 years, retired neighbour next door drives a 15 year old Ford. Both retired but completely different lifestyles.

[juleswombat]

I don't understand the models, assuming the same income levels for the duration of retirement. Early retirees will be spending more, fit and healthy, long awaited world trips, hobby toys etc. So spending will typically be higher in your 60s than in your mid to late 70s. Later retirement is pretty binary, but typically very low spend due to ill health, lack of mobility etc. But the catch is, care and health care costs for a minority, typically selling houses to pay for final care costs etc. I don't think so many 90 year olds are worried about their finances or pleasing the bank managers. They just want to die if they are in poor health.

[ianjames]

Keep your monthly expenditure down and realistic when working or have expenditure that you can bin when you retire……ie. Pension savings. When your income reduces reduce your outgoings similarly.

[justintrainer]

Thanks for a good view. Always impossible to model someone's requirements but the go-go, go slow and no-go reductions in expenditure would be good to mention as I see that all the time so seems pretty typical/realistic. Maybe marrying this to the average retirement savings pot would be a great video so we could see if £440k was a typical or higher pot than what many people have achieved. Appreciate the video🙂

[denisfitzgerald]

Where do these averages come from most people never earn these amounts before tax never mind after tax. 43k for moderate! I’d like to see the data of how many people retire with this figure. The UK average pension pot is way below this figure. I’m in my 50’s and don’t need anywhere near this figure to live a good life. Let’s have a video showing what the average person will need to retire based on real world numbers.

[bambit]

Thank you - this is very helpful. As a woman in my early 60s (with a degree) I have worked all my life and cared for my parents and an ill younger brother. I can say women have had much lower income generally than men (doing the same work) and have been utterly shafted by George Osborne raising the women's state pension age. Trying to get a decent job in your 60s is NOT easy.

[charliepaynter]

What a fantastic cash flow model (7:03 onwards) - I am assuming that the author of the model (Voyant), will only share its template with subscribers to its services? Thanks for the content.

[kithale]

I am state pension age and disabled. Due to not working outside the home for many years I get 300 per month. My husband is younger and thanks to the fear mongering we are very worried. It looks to me that those people who have not saved will get help while those who have will get no help until they spend al their savings. I have fought cancer three times if I had known how evil Starmer's government would be I would not have fought at all.

[ohyesitsme]

Living in another world. Lots of retirees live on a basic state pension.

[dallassukerkin]

Every time I watch a video on this topic I am staggered by the sums of money being talked about! I have prepared the way as best as my income has allowed and I am still only just over 100k in the pension pot. The assumption that couples will both bring something to the table is more reasonable than the amounts but it is not universal. I am one of those fellows who is 'carrying the bag for two' and what is going to happen when I stop work is not a pleasant prospect.

A question that occurs is just when did the government decide that it was okay to budget for a State Pension that did not even cover basic living expenses?

[summerrr]

I’m 37 and have just over 300k across various pots. I’m planning on increasing this to 500k over the next 4-5 years and then stopping contributions. I’ve worked out that this 500k will then grow organically to around 1.3m over the following 17 years (until I get to 58 and can start to withdraw), assuming a growth rate of 6% annually. I am paying in aggressively now as I plan to semi retire at 44. Does this sound like a reasonable plan or am I missing something key?

[davidfolts]

Neat, as wage inflation increases, so does the standard of living. Thanks, Principles Personal Finance.🔥