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Critique my British Budget!

Critique my British Budget!

Old Jul 13th 2020, 4:03 pm
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Default Critique my British Budget!

As part of our evaluation of where to live in about 2 years time I've pull together a retirement budget and was wondering for those of you with living in the UK experience would critique it for me. Some important information:

Couple 45 and 50 in good health, wife will need to pay for NHS subsidy until she is eligible
Assume no mortgage and house bought outright (~300,000 GBP max)
Non London living, probably Wales/Yorkshire/North of England - still TBD.
Pets assume 2 cats and 2 dogs for this exsersize
Vacation - 3 a year overseas, 6 or so in the UK, nothing fancy, not camping but budget accommodation etc.
Meal out once a week
Essentials from Aldi and nicer stuff from Sainsbury's/Tesco
Car - medium size hatchback or estate VW Passat or Subaru Forester

Anything in the budget below of concern, as in you have way too little in that category or way too much? Sorry about the off number I was working in US$ and just did a conversion.

Thanks in advance for your help!


Budget

Cars/Everyday Transport - £4,286

Clothes - £714

Eating/Drinking Out/House Drink/Take Out - £2,857

Electronics/Durable goods - £1,429

Entertainment - 1,429

Gifts/Charity - £1,429

Health - £3,571

House Tax and Insurance - £3,571

Household essentials - food, cleaning products, 1 cell phone, internet etc. - £4,286

Large Ticket Items - £2,143

Other - £357

Pets - £2,143

Utilities - £1,429

Vacation - £14,286

Yard & House Maintenance - £714



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Old Jul 13th 2020, 4:31 pm
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Default Re: Critique my British Budget!

Without more information about your lifestyle and expectations it is hard to say much about most of those numbers other than to say that they are "doable", but might not be very generous., so the £714 for house and yard maintenance might be a sunstantial over-budget figure, if you are handy and are capable of doing most things yourselves, but could be used up very quickly if you call a plumber or electrican a couple of times during the year.

That said the number that leaps out to me as being much lower than I would expect, is the food and household consumables - divide that figure by 52 and you get £82, and I am not sure that is achievable unless you plan on living on cheap mince, rice, and beans.

Also clothes - while you might not spend £700 every year on clothes, and some clothes last a long time, it wouldn't take many garments at £30-£60 to burn through most of £700. And bear in mind that cheap garments probably wear out more quickly. That is certainly our experience - a cheap T-shirt can fade, stretch, and come apart within a year or two, whereas a premium T-shirt costs a lot more but should last 10 years, though eventually be relegated to wear when gardening or painting.

I think you mignt find it informative to divide the numbers for on-going (frequent) expenditures - so petrol, pet food, entertainment, etc. by 52, to get a weekly amount - that might give you an insight into whether you have budgeted enough.

And what do you envisage paying for with your "health" budget? You could buy a lot of plasters, aspirin, and cough medicine with your budget figure! Even your wife's NHS access charge will take up only a small part of £3,570/yr.

Last edited by Pulaski; Jul 13th 2020 at 4:49 pm.
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Old Jul 13th 2020, 4:38 pm
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Default Re: Critique my British Budget!

Having left the UK in 2000 I can't comment on whether the figures you quote are anywhere near accurate.

However, the budget figures add up to around 45K GBP, so I'd say if you have an income of 50KGBP + and you have no mortgage/rent and you are living in Wales/Yorkshire etc and not in a metropolitan centre, you'll do OK.

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Old Jul 13th 2020, 5:01 pm
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Default Re: Critique my British Budget!

Originally Posted by Pulaski View Post
Without more information about your lifestyle and expectations it is hard to say much about most of those numbers other than to say that they are "doable", but might not be very generous., so the £714 for house and yard maintenance might be a sunstantial over-budget figure, if you are handy and are capable of doing most things yourselves, but could be used up very quickly if you call a plumber or electrican a couple of times during the year.

That said the number that leaps out to me as being much lower than I would expect, is the food and household consumables - divide that figure by 52 and you get £82, and I am not sure that is achievable unless you plan on living on cheap mince, rice, and beans.

Also clothes - while you might not spend £700 every year on clothes, and some clothes last a long time, it wouldn't take many garments at £30-£60 to burn through most of £700. And bear in mind that cheap garments probably wear out more quickly. That is certainly our experience - a cheap T-shirt can fade, stretch, and come apart within a year or two, whereas a premium T-shirt costs a lot more but should last 10 years, though eventually be relegated to wear when gardening or painting.

I think you mignt find it informative to divide the numbers for on-going (frequent) expenditures - so petrol, pet food, entertainment, etc. by 52, to get a weekly amount - that might give you an insight into whether you have budgeted enough.

And what do you envisage paying for with your "health" budget? You could buy a lot of plasters, aspirin, and cough medicine with your budget figure! Even your wife's NHS access charge will take up only a small part of £3,570/yr.
Thanks for your reply! I'm surprised that you think household essentials is high, not sure if us being vegetarians keeps it lower than one would expect but that is kind of on par with what we spend today (in the US) and we eat a lot of fresh fruit and veg and don't skimp on anything really. Maybe the cost of food is higher then I expected but this is good feedback as I will allocate a bit more just in case.

Health budget is driven by what I thought I would spend in a US scenario so yes I think it is high for the UK but I'd rather be too high and have a bit extra (or allocate to another category) at this point in the analysis.

House Maintenance - I hate DIY so I'd like to get a place with minimal upkeep (I tend to think British houses require less upkeep for some reason having been a homeowner in both). Still good feeback.

Thanks!
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Old Jul 13th 2020, 5:09 pm
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Default Re: Critique my British Budget!

Originally Posted by GOALFIRE View Post
Thanks for your reply! I'm surprised that you think household essentials is high, not sure if us being vegetarians keeps it lower than one would expect but that is kind of on par with what we spend today (in the US) and we eat a lot of fresh fruit and veg and don't skimp on anything really. Maybe the cost of food is higher then I expected but this is good feedback as I will allocate a bit more just in case.
Generally people say that food is cheaper in the UK, but if you're vegetarians then, yes, that would likely explain things, and your budget for food should be fine.

The US federal statistics on household expenditure start at around $200/person/mth, and go up to around $350, so if you and your wife are managing in the US on $450/mth then that is close to the lowest end of what the Federal government considers to be the normal range for expenditure on food and consuambles.
..... Health budget is driven by what I thought I would spend in a US scenario so yes I think it is high for the UK but I'd rather be too high and have a bit extra (or allocate to another category) at this point in the analysis. ....
OK, yeah, I think you're waaay over on health if you're living in the UK
.... House Maintenance - I hate DIY so I'd like to get a place with minimal upkeep (I tend to think British houses require less upkeep for some reason having been a homeowner in both). Still good feeback.
I think you're absolutely right there - I often say that our home (in NC) is as much a hobby as it is the place we live. .....
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Old Jul 13th 2020, 9:26 pm
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Default Re: Critique my British Budget!

Originally Posted by SanDiegogirl View Post
Having left the UK in 2000 I can't comment on whether the figures you quote are anywhere near accurate.

However, the budget figures add up to around 45K GBP, so I'd say if you have an income of 50KGBP + and you have no mortgage/rent and you are living in Wales/Yorkshire etc and not in a metropolitan centre, you'll do OK.
That was my thinking from a high level, I'd look at average household income for an area and compare to mine. Knowing I won't have to pay rent or a mortgage and am not looking to 'save' any of my income I think I'd be live a nice life anywhere aside from London. I got some buffers on the total spend to account for taxes and unexpected things. So I think I should be OK.

Thanks for the reply.
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Old Jul 13th 2020, 9:49 pm
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Default Re: Critique my British Budget!

That annual estimate is around £45k but no mention of income and payroll taxes (NI) so I think you would need a close look at that. Two people earning £30k each will pay a lot less in taxes than one person earning £60k.
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Old Jul 13th 2020, 10:26 pm
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Default Re: Critique my British Budget!

Originally Posted by durham_lad View Post
That annual estimate is around £45k but no mention of income and payroll taxes (NI) so I think you would need a close look at that. Two people earning £30k each will pay a lot less in taxes than one person earning £60k.
Thanks, not sure if it matters but we won't be working at all (or at least that is the plan) so we won't have any income from a job. All our spending will come from savings and investments and eventually drawing from our IRA/ROTH IRA/SS. I'd earmarked 25% on top of our budget for taxes but was thinking it would be much lower as we can control capital gains, at least until we start drawing SS and have RMD's (but I have a plan to minimize them by doing Roth conversions too).
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Old Jul 13th 2020, 10:42 pm
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Default Re: Critique my British Budget!

Originally Posted by GOALFIRE View Post
As part of our evaluation of where to live in about 2 years time I've pull together a retirement budget and was wondering for those of you with living in the UK experience would critique it for me. Some important information:

Couple 45 and 50 in good health, wife will need to pay for NHS subsidy until she is eligible

Health - £3,571
Re. your health budget.

The Immigration Health Surcharge (IHS) of (currently) £400 per year is paid at the same time as your wife's visa application fees, so for her 2.5 years she'll pay £1,000 up front, same for the second 2.5 years. Unless you're planning to pay privately for some treatment there's nothing more to pay for medical services. GP, specialist (consultant), in and outpatient hospital treatment are all fully covered under the NHS. So as a British citizen you won't have any out of pocket expenses for these services, and neither will your wife as she will have paid her IHS.

You do have the option of paying privately for some treatment if you wish, an example of that is surgery my husband needed for a shoulder problem. His specialist advised that the waiting list for this surgery was up to 12 months, and as his shoulder was causing him discomfort he elected to have the surgery done privately (paying the surgeon etc direct and having the procedure in a private hospital). The total cost including MRIs, surgery and an overnight hospital stay was £6,250. Just an aside, he said the private hospital was rubbish and the level of nursing care nowhere near the standard of an NHS hospital he'd been in the year before.

NHS prescription charges are currently £9.15 per script, no charge for over 60s and for some medical conditions.

Dental.
Private dentists are expensive, similar to most Western countries.
NHS dental services are charged under three 'bands'.
Band 1 is £22.70 and covers items such as a scale and clean
Band 2 is £62.10, fillings and extractions are a couple of the treatments charged under this item
Band 3 is £269.30 and covers bridges, crowns and dentures among other treatments

I'd move a good whack of your health budget to household expenses. Unless you access private services I'd be surprised if you spent more than £500 per year on health expenses.
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Old Jul 14th 2020, 4:30 am
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Default Re: Critique my British Budget!

Originally Posted by spouse of scouse View Post
Re. your health budget.

The Immigration Health Surcharge (IHS) of (currently) £400 per year is paid at the same time as your wife's visa application fees, so for her 2.5 years she'll pay £1,000 up front, same for the second 2.5 years. Unless you're planning to pay privately for some treatment there's nothing more to pay for medical services. GP, specialist (consultant), in and outpatient hospital treatment are all fully covered under the NHS. So as a British citizen you won't have any out of pocket expenses for these services, and neither will your wife as she will have paid her IHS.

You do have the option of paying privately for some treatment if you wish, an example of that is surgery my husband needed for a shoulder problem. His specialist advised that the waiting list for this surgery was up to 12 months, and as his shoulder was causing him discomfort he elected to have the surgery done privately (paying the surgeon etc direct and having the procedure in a private hospital). The total cost including MRIs, surgery and an overnight hospital stay was £6,250. Just an aside, he said the private hospital was rubbish and the level of nursing care nowhere near the standard of an NHS hospital he'd been in the year before.

NHS prescription charges are currently £9.15 per script, no charge for over 60s and for some medical conditions.

Dental.
Private dentists are expensive, similar to most Western countries.
NHS dental services are charged under three 'bands'.
Band 1 is £22.70 and covers items such as a scale and clean
Band 2 is £62.10, fillings and extractions are a couple of the treatments charged under this item
Band 3 is £269.30 and covers bridges, crowns and dentures among other treatments

I'd move a good whack of your health budget to household expenses. Unless you access private services I'd be surprised if you spent more than £500 per year on health expenses.
Will just say that this is for England only. Scotland and Wales have different systems. In Scotland, prescriptions are free. Dental check ups are free and the other costs a lot lower - I had a filling drilled out and a new filling put in earlier this year and I think it was about £25.
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Old Jul 14th 2020, 4:53 am
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Default Re: Critique my British Budget!

Originally Posted by verystormy View Post
Will just say that this is for England only. Scotland and Wales have different systems. In Scotland, prescriptions are free. Dental check ups are free and the other costs a lot lower - I had a filling drilled out and a new filling put in earlier this year and I think it was about £25.
I did think of that after I'd posted. The OP said he's planning to live in England or Wales, prescriptions are free in Wales and the charges for the three dental bands are a little less than in England.
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Old Jul 14th 2020, 7:20 am
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Default Re: Critique my British Budget!

An income like that will make for a comfortable life. Most manage on much less !
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Old Jul 14th 2020, 7:43 am
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Default Re: Critique my British Budget!

Originally Posted by GOALFIRE View Post
Thanks, not sure if it matters but we won't be working at all (or at least that is the plan) so we won't have any income from a job. All our spending will come from savings and investments and eventually drawing from our IRA/ROTH IRA/SS. I'd earmarked 25% on top of our budget for taxes but was thinking it would be much lower as we can control capital gains, at least until we start drawing SS and have RMD's (but I have a plan to minimize them by doing Roth conversions too).
Excellent. Some of our income comes from those sources as well. (We retired at age 55)

Since my wife has no pension income we moved nearly all our savings into her name and into “HMRC Reporting “ ETF funds so that most of our cap gains when selling fund shares are tax free and qualified dividends attract the tax free portion plus lower tax rate.

All of my IRA money is now converted to a Roth. We’ll complete the last of my wife’s Roth conversions next year jus before she starts drawing OAP and SS.
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Old Jul 14th 2020, 7:45 am
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Default Re: Critique my British Budget!

It might be prudent to use a circumlocution in Britain. "IRA Money" sounds like you are receiving money from Gerry Adams.
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Old Jul 14th 2020, 8:56 am
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Default Re: Critique my British Budget!

Originally Posted by durham_lad View Post

Since my wife has no pension income we moved nearly all our savings into her name and into “HMRC Reporting “ ETF funds so that most of our cap gains when selling fund shares are tax free and qualified dividends attract the tax free portion plus lower tax rate.
Are married couples taxed as individuals in the UK, or is there some other logic to moving assets into her name (only?) when living in the UK? Neither my wife or I have a pension but we'll both have IRA/Roth IRA and our projected SS will be very similar. The only difference is my wife is 5 years younger than I so (at the moment) there will be a 5 year gap between me drawing SS and then her drawing her SS at 70.

Not sure if there is any benefit in us moving assets around in the future but certainly worth looking at if it saves us a bit in taxes in the UK. I don't think it would make a difference in the US being as we file married filed jointly.

Thanks in advance for your help.
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