THE EASIEST RETIREMENT CALCULATOR IN THE WORLD

Retirement planning doesn’t have to be complicated. Work out exactly how much your dream retirement is going to cost with this simple retirement calculator. 

All the hard work has been done for you using up-to-date industry figures and average retirement spending along with our own research to provide you with simple calculations to help you budget for the kind of retirement you want.

How to use our retirement calculator

To start, select ‘Basic retirement costs’ and then simply tick the box for each of the items you want to add to your retirement budget. We’ve included some items with sliders, so you can increase or decrease your spending in those areas to suit your needs.

Working out how much your retirement will cost – our assumptions

This calculator is designed to be used a general guide, it can be a useful tool for retirement planning but it’s not designed to replace professional, tailored advice.  We used part research, part average figures to work out these costs details of which can be found here:

Basic Retirement Costs

We’ve used the Joseph Rowntree Foundation’s Minimum Income Standard to set our basic retirement costs. This figure is for a single pensioner and was updated in 2018. Basic retirement costs cover the minimum amount that is needed to have an acceptable living standard. The figure is set by focus groups that represent the general public within defined demographic brackets.

The figures allow £7345.78 per year for Housing and household goods – this includes council tax and utilities as well as rent or mortgage interest payments. If you have paid off your mortgage you may find that this figure is too high – remember these figures are based on averages and this calculator is designed as a guide.

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Home maintenance & redecoration

The basic retirement costs allow for bills and rental payments, but research carried out by Onepoll.com showed that the average person in the UK spends £1081 a year on tradesmen with a further £505 on decorating and £203 on DIY. It can be a significant cost for single people and couples (see our couple retirement calculator).

Own a dog

We’re known as a nation of dog lovers. Our four-legged friends have been known to improve your mental health, get you out and about, and may even hold the key to a restful night’s sleep! But all that unconditional love and companionship is not without its cost. The cost of food, treats, vet bills and pet insurance can easily mount up. with pet charity PDSA estimating that the cost of having a dog can average up to £2750 per year over its lifetime.

Gardening

Gardening can help reduce anxiety, depression and help keep you trim, and has also been shown to improve life satisfaction, quality of life, and foster a sense of community. According to a 2016 survey by Policy Expert, Brits spend an average of £345 per year on plants and ornaments.

9 hobbies that are scientifically proven to boost your happiness in retirement https://t.co/3QL0Pwg84o #retirement #Happiness pic.twitter.com/E1KVgMz3yc

— 2020 Financial (@simonpgarber) January 17, 2019

TV Package (Sky/Virgin/BT)

It’s definitely worth shopping around for deals on TV packages as they can be fairly pricey. If you already have Amazon Prime for their delivery service you get access to their on-demand TV and film service as part of your package. We’ve budgeted for a mid-range Sky or Virgin package at £40 a month.

Recreation and Leisure

Spending on recreation shouldn’t be overlooked, especially in retirement. Often retiring can move you away from a workplace environment with a built-in social support network, therefore enjoying activities that foster new connections in retirement is incredibly important. The activities you choose in retirement can impact your happiness and several are even proven to improve your health and mental well-being

Research for the Office of National Statistics in 2017 revealed that households in the 65-to-74-year-old age group spent nearly a fifth of their total spending on recreation and culture.

Yoga twice a week

Golf Club Membership

Budgeting for retirement? The average UK Golf membership will set you back £901. How much will your retirement set you back? https://t.co/8CM6qMm7AD pic.twitter.com/1jWNhqx0gm

— 2020 Financial (@simonpgarber) January 17, 2019

Tennis Club Membership

All-in, we’ve allowed £300 a year assuming you spend £100 on kit and helmets every year and replace your bike every 4 years.

Transport and Holidays

Travel is one of the top ambitions people have for their retirement so it’s not surprising it’s an area where people spend the lion’s share of their money. Research by consumer group Which? showed that on average retirees enjoying a comfortable retirement are spending £4491 a year on European travel & holidays and those enjoying a luxury retirement are spending an additional £7376 on long-haul travel.

A new car every 5 years

We’ve borrowed these workings from Fidelity who have estimated that A new petrol car costing £15,000 will set you back £3,300 a year in running costs (based on a person doing 10,000 miles) taking into account road tax, insurance, breakdown cover, replacement costs including tyres, servicing costs, petrol and parking costs. Assuming yearly depreciation is £2,200 a year on the car, the resale value of the car after 5 years is £4,200 and if you want to replace it every five years you’ll have to save £2,200 a year towards it. Total costs for running the car and saving for a new one every year is £3,300 + £2,200 = £5,500.

Gifts and donations

Christmas

It’s estimated that the average grandparent spends £167 on their grandchildren alone at Christmas. With the average person in the UK spending £923 on Christmas in total including gifts, decorations, food and drink, it’s an area that’s worth including in your retirement budget if you don’t want to be caught short.

Gifts for family

Many of our clients want to help children or grandchildren get on the property ladder, or assist with university fees.

Information provided by Prudential shows that almost a third of those looking to retire in 2018 were spending on average £4300 per year supporting up to three family members ranging from children, grandchildren and in some cases, even parents.

The Full State Pension

We’ve included the option to deduct the full state pension amount from your retirement budget, so you can see how much extra you’ll need to save for retirement (click here for an early retirement calculator).

Please note, not everyone will be eligible for the full state pension. To qualify for the full state pension, you’ll need 35 qualifying years of national insurance contributions. To get anything at all you need a minimum of 10 years NI contributions and the amount you’ll receive will be pro-rated. Use the free government website to get an accurate state pension forecast 

Retirement Planning Next Steps

Now that you know roughly how much you’ll need to enjoy your retirement, it’s time to build a plan

1. Check your current State Pension estimate
2. Request an up-to-date statement for your current pension/s
3. Set a goal retirement date
4. Talk to a financial adviser to help you put together a solid retirement plan