When living on a fixed income in retirement, it’s important to make sure that your income does not exceed your expenses. No matter your income bracket, living more frugally is something that anyone can do.
Here are eight simple ways that you can help to cut costs in retirement.
1. Plan Before Your Retirement Starts
Start by reviewing your current finances in detail. Take an afternoon (or longer) to sit down and go through your bills from the last three months. Include things like mortgage payments, monthly direct debits, standing orders and any personal expenses.
You should then build a clear picture of exactly how much money you will have each month in your retirement. Take into account any allowances or benefits that you qualify for too.
Once you know how much money you’re currently spending and how much you'll have in your retirement, you should check and cross-reference the figures. This will let you know whether you can meet your financial needs comfortably, or whether there are any problem areas to improve on.
For example, you might decide that your TV package is too expensive and opt for a cheaper one, or that your phone contract could be adjusted. You may be pleasantly surprised by the amount that you save by not having to travel to work too!
For additional financial planning advice, you can also read this guide.
2. Consider Downsizing
A smaller home means lower utility bills and fewer maintenance costs. Downsizing can also mean that your home is easier to look after, giving you more time to spend enjoying your retirement.
An apartment can be a brilliant way to do this, taking even more pressure away and giving you a modern, comfortable space to call your own. All our apartments, for example, have been designed specifically for people in retirement, with luxury details and convenient touches designed to make life more comfortable.
We also offer free entitlements advice, helping you claim and understand any allowances that you are entitled to - according to Age UK and CAB, retired people in the UK fail to claim over £5 billion a year to which they may be entitled.
3. Decide How You Will Receive Your Pension
Currently, there are two ways that you can receive your state pension. You can obtain it in the form of a weekly payment, or, you can choose to receive the full amount in a single payment. In both cases, your National Insurance record will determine the amount that you'll receive.
Planning your financial situation before and after you start retirement will help inform how you decide to receive your payments. For many people, having the security of a fixed income is ideal. However, if you have fewer expenses to pay than you expected, or are planning to sell your house for a profit, you might opt to receive your pension in a lump sum and choose to invest it in a new home, business or extended-holiday abroad instead.
4. Start Your Retirement With a Clean Slate
Paying more substantial debts may not be a possibility for everyone. However, you can still help create a clean slate for your retirement by paying off small personal loans. Even though such payments may seem to be a low amount, eliminating it from your monthly outgoings will help streamline your finances and make future financial planning easier.
5. Cut The Costs of Travel
When you reach pension age, take advantage of it by claiming a free bus pass. You will be able to enjoy unlimited travel on public bus services throughout Britain, at any time. If you’re unsure if you qualify, you can use the government’s free bus pass checker.
Anyone over the age of 60 is eligible for free travel on buses, tubes and other public transport in London. In Wales, you can get a free bus pass at this age too.
Additionally, anyone over the age of 60 is eligible for a senior railcard, giving you a third off train fares across the country!
6. Did Someone Say Extra Discount?
When you reach 60, there are also a variety of other discounts available to help your money go further and enjoy your free time. Entertainment and lifestyle examples include cinema passes such as Odeon’s Silver Club, a free TV license and certain leisure centre or gym discounts.
National Trust and English Heritage also provide age-specific discounts, giving you the opportunity to explore the beautiful countryside and historic sites of Britain.
There are also plenty of discounts to boost your wellbeing, including free NHS eye tests, prescriptions and 25% off glasses at Specsavers. Those over the age of 60 can also receive a winter-fuel allowance, to help make your energy bills more affordable.
7. Reduce Your Spending
Spontaneous purchases, indulgences and extra comforts can all add up, even if they seem like a small cost at the time. Typical examples include casual coffees, late-night takeaways, alcohol and luxury branded goods.
As well as cutting down, it’s also a smart move to pick apart your monthly spending by keeping a diary to monitor what you’re buying. There are plenty of great apps that will make keeping track of these expenses much more manageable, such as Expensify.
You can also look into saving money when shopping by opting for zero-package alternatives, or unbranded items where possible. Not only will this be more cost effective, but it can also help you become a more environmentally-friendly consumer too.
8. Make Money From Your Clutter
Go through wardrobes, cupboards, bookshelves and your garage or loft, putting aside items that you haven’t used in over six months, or that you no longer want.
Rather than simply binning these unwanted items, you can look to sell them on eBay or Facebook Marketplace, to potentially bring you some extra cash, as well as a detoxed home. Selling your clutter is especially useful for anyone who plans on downsizing or moving home in retirement.
Remember, retirement is the perfect opportunity to focus on your happiness and interests. So, whether you’re preparing for your retirement or looking for ways to save, by reducing your costs and planning for a fixed income, you can make your retirement less stressful and more enjoyable.
For more inspiration, you can read more financial tips and advice.