15 November 2017

How might my spending change in retirement?

One of the hardest things in retirement planning is trying to figure out what your number is. That is, how much will you need to live on in retirement. The best place to start figuring this out is to look at your current spending. If you aren't tracking it, start now.

I don't have a budget as such, but I do use YNAB so I can look back and see what I spent each month. I have my spending pretty much under control nowadays, so I am very aware if I am having a 'spendy' moment and am able to reign myself in very quickly. Currently I have all of my four children living with me, so some expenses are inflated, but this will change over the next five years or so.

I know exactly how much I spend now, but how might my expenses look during retirement?


I currently rent a four bedroom house from the local housing association. I have lived in this property since 2004. Due to the lengthy tenancy, my rent only increases by a minimal amount every year, and thus the amount I pay is around half what I would pay for a similar property if I rented from a private landlord. Even when all the children have left home, I would be mad to give this house up until I felt it was the time to jump ship.

I am saving for a house deposit, which I hope to use to buy a small property in France to retire to in 2028 when I turn 55. The plan is to purchase during the next couple of years, with a mortgage, and then use as a holiday home, while renovating and when I can finally access my pension, use the 25% tax free lump sum to clear the mortgage.

Cost now: £600 per month
Cost in retirement: £0


As there are five of us living in our home, despite being fairly frugal with our utilities, I still pay a fair amount toward this part of my budget. All utilities come to a total of £110.62 per month. During retirement, I expect this cost to drop significantly. My plans include a log burning stove and some form of solar system set up. As I will be living somewhere significantly warmer than the UK, plus only cooking and heating for a couple in a much smaller house, I expect to see at least a 50% drop in this area.

Cost now: £110 per month
Cost in retirement: £55 per month

Council Tax

One of the biggest bills UK residents face is the council tax. I pay around £130 per month. After researching the French equivalent it appears that unless you have your exact income and value of property, it is far too complicated to estimate, so I shall, for ease, assume it to be the same as now until I find out differently.

Cost now: £130 per month
Cost in retirement: £130 per month


My current grocery spend hovers around the £400 per month mark. I expect this cost to gradually reduce over the next few years as the children leave home. I do expect to be able to buy a few nicer groceries occasionally, however, my heart lies with Lidl, so I don't see myself overspending in this category.

Cost now: £400 per month
Cost in retirement: £100 per month

Misc Costs that will reduce during retirement

I can think of loads of things that will reduce when I am not in full-time employment and not running a five person household; work clothes, normal clothes, petrol costs, food at work, convenience items, kids allowances to name just a few. Unfortunately with so many changes to come, it is almost impossible to gauge the extent of these savings this far out. I am expecting that I will own a small car in France and not the mammoth motorhome which I currently zip about in which should reduce some costs, annual habitation check for one! I also expect to pay no National Insurance, tax or pension payments.

Misc costs that will stay the same during retirement

I don't expect many changes to my regular expenses like mobile phone bill and internet service. I don't have a TV and have no plans to change that. I store all information and paperwork in the cloud, so have a monthly subscription to Evernote, which I expect to continue and of course Netflix. I expect to pay roughly the same for gifts, as I do now.

Misc Costs that will increase during retirement

As I will already be in Europe, I will be taking advantage of the train services that run all across the continent to access travel to other countries, while using cheap accommodation to see all the places I want to visit. I never have been a posh hotel type of person, and I don't expect I will change now. I like cheap travel, I love the thrill of getting a bargain but I do expect to travel much more when I retire, at least for the first ten years or so, thus an increase in this category will be very likely.

With just over ten years until I reach 55, there is a lot that could, and will change. By tracking my expenses now, I can plan for the future and course adjust as the situation changes.

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