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What’s the cost of a comfortable retirement?

013th September 201720th December 2018
By Oakwood Mortgage ServicesIn General

Have you ever stopped to think about the monthly income you’d need to provide for a comfortable retirement?

If you’re thinking it would be the equivalent of your current salary you’ve probably overestimated.

Remember, by the time you retire, you will hopefully have paid off your mortgage, your kids (if you had them) will have flown the nest and you won’t have to cover the cost of commuting to work. In fact, research by Which? suggests you’ll probably need between half and two thirds of your final salary, after tax, to achieve a comfortable lifestyle in retirement.

According to Which? retirees will need £18,000 a year to cover household essentials such as food £3,967, utilities £2,040, transport £2,407 and housing costs £1,444.

Average annual spending for retired couples Comfortable lifestyle Luxurious lifestyle
Long-haul holidays  £                                     –  £                  7,415.00
European travel/holidays  £                        4,414.00  £                  4,414.00
New car cost  £                                     –  £                  4,376.00
Groceries  £                        3,967.00  £                  3,967.00
Housing payments  £                        2,969.00  £                  2,969.00
Insurance  £                        2,457.00  £                  2,457.00
Transport  £                        2,407.00  £                  2,407.00
Utilities  £                        2,040.00  £                  2,040.00
Recreation and leisure  £                        1,591.00  £                  1,591.00
Household goods  £                        1,444.00  £                  1,444.00
Leisure membership  £                                     –  £                  1,338.00
Health  £                        1,287.00  £                  1,287.00
Buying news clothes  £                        1,092.00  £                  1,092.00
Tobacco/Alcohol  £                            933.00  £                      933.00

Saving sufficiently

Now you know the sort of income you’d like in retirement; how much will you have to save each month to achieve it?

Which? suggests, alongside the State pension, to generate an annual combined income of £26,000 couples will need a defined contribution pension pot of £210,000.For a luxurious retirement, this more than doubles to £550,000 invested in income drawdown with 3% investment growth. The table below shows the money you’ll need to be saving each month to achieve this – obviously, the amount increases as you get older:

Age Comfortable Luxurious
20 £131 £342
30 £198 £424
40 £338 £731
50 £633 £1657

The numbers may look scary but when it comes to saving for the lifestyle you want in your retirement the earlier you start and the more you can contribute the better.

Whether you’re in your 20s or 60s, on track with your savings or worried you’re behind where you should be, please get in touch and we’ll help you explore your retirement income options.

The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.

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In these current times Stuart has assisted me with a temporary solution to my mortgage issues which went very smoothly. I will be working with Stuart again very soon to change mortgage product completely. Thank you Oak wood Mortgage Services
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I would like to say a huge thank you to Oakwood Mortgage Services and in particular to Richard Burley who seems capable of working miracles, particularly when dealing with the complicated applications of a sportsman. Richard’s calm manner and problem solving have been brilliant over the years and allowed both Katie and I to stay relaxed and in control during stressful house buying moments, as well as helping us to navigate the the complex buy-to-let market! We owe a huge debt of gratitude to Richard and Oakwood mortgage services ahead of moving house next week, and I would highly recommend their services. In particular I would recommend them to other sports people who have previously struggled with mortgage companies based on our short contracts and the potentially volatile nature of our work. Thanks again Richard. Ben and Katie
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I gave Stuart at Oakwood Mortgage services a challenge of finding me an impossible mortgage. I knew I wouldn't get exactly what I wanted, but he came up with some nice surprises. He explained everything, not pushy at all, a friendly and professional approach. Thank you
nicky Myers
nicky Myers
19:17 25 May 20
We were first time buyers and dealt with Richard around the mortgage application. He helped us understand each process, explaining everything thoroughly and came to meet us twice where he was very personal and efficient. Dave took us through the building and contents and life insurance process, again coming to meet us in person and took us through the options, step by step. Dave was very communicative and answered any questions we had.Emma was there throughout this process and on hand with any urgent queries we had and was a delight to deal with.They managed to make it all happen, even during lockdown!Highly recommend Richard, Dave, Emma and Oakwood. We are very happy in our new home!
Daniella Castro Gouveia
Daniella Castro Gouveia
11:31 19 May 20
I have worked with a number of the Oakwood team over many years and they are all excellent and totally professional at what they do. Dave came to our family home a few years ago to discuss and advise us in terms of financial insurance. He was very knowledgeable, really easy to talk to. Sometimes discussing financial things can be quite tricky to understand, but I felt at complete ease with Dave. I would highly recommend speaking to him if you need insurance or even need a mortgage as he covers both areas. Thanks for all your support Dave. It's always good to have someone who has your back!
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Richard Craven
19:12 03 May 19
Stuart was excellent, helped me obtain a mortgage quickly and painlessly with minimal effort and was always ready to promptly answer any questions I had.
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Stuart was very profession and friendly, He was there to help when something went wrong.Highly recommend!!
Ian L
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When we started looking for a house, we contacted Stuart based on a work colleague's recommendation. Having not bought a house in the UK before, we had a lot of questions.Stuart guided us through the process and was always available to answers questions and provide advice that was easy to understand.We had a protracted period between initial contact and purchase, in this time Stuart was patient, professional and provided us with a high level of confidence that we were in capable hands.A huge thank you to Stuart and the staff at Oakwood, we would not hesitate to recommend them.Ian and Yoosun
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The team is very friendly, professional and knowledgeable on their given subject. My situation was rather unusual and my options were very limited, if i had tried on my own i wouldn't have found the best deal for me. The information provided to me was well presented and insightful, if anything was unclear they made sure that i understood things fully. In the end they found the best deal out there that ticked all the boxes i needed and went above and beyond. To make sure i wasn't put into a position i couldn't afford to be in Stuart would go to an agent and tell them when things weren't possible, even when they were insistent on getting a deal, Stuart had my back in it!I can't recommend them enough, and will be returning to them down the line myself!
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