‘I’m 55 and have a £3m pension pot – this is how I spend my money’
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I’m very fortunate that my job has allowed me to travel, but it has come at the cost of my family life.
We moved to Germany 10 years ago. While it means my daughters now speak German, I probably only picked them up from primary school about five times as I was away so much.
I’ve worked in the energy industry since leaving university 35 years ago, and started at one of the world’s largest companies earning £43,000 in today’s money on their graduate scheme.
I went on to hold director positions for more than a decade, earning £250,000 per year after bonuses.
We came back to Britain a few years ago and I was able to negotiate an exit package, which included a large pension deficiency payment. I now have £3m in my pension pot and I work three days a week for a small energy firm.
I have always saved, particularly into my pension. I was able to buy Added Years and this really helped build up my pot. My mantra is if you look after the pennies, the pounds will look after themselves.
I also have a pretty sizeable Isa pot as well, and this is my safety net. I always encourage my children to save and they all have Isas, even the two at university.
My monthly income is approximately £5,200. As I have recently converted a third of my pension into an annuity, I will be receiving a further net £2,500 later this year. My provider is apparently inundated with annuity requests and it’s taking over six weeks to turn them around. As mine is a big one, it’s taking even longer.
I don’t think of myself as tight. I enjoy holidays, going out (a lot) and spending money on the house. However, I don’t do clothes for me, or beauty stuff.
Vital Statistics
Age: 55
Post-tax monthly income: £5,200 (rising to £7,700 later this year)
Monthly Bills: c. £2,000 split between our house bills – we live in an old and very draughty listed house – and supporting two daughters at university. We also have three cars, one motorbike and a big expensive dog.
Day 1
I started my day by heading to the bakers, dog in tow. By the time I got there they’d run out of wholemeal bread, so I spent £1.41 on a small white loaf and a box of six eggs for £1.70.
Realising I didn’t have anything for dinner I popped into Lidl in the early afternoon and spent £46.32. I was most excited to be there in time to pick up a £1.50 veg box, and was chuffed with the wobbly aubergine as there seems to have been a run on them – neither my local Waitrose or Lidl had any stock earlier in the week. This food shop is intended to last until the weekend – but it never does.
I also ordered £150-worth Nespresso capsules for £43.50. I am a Nespresso Ambassador (they do know how to make you feel important) and take great pleasure in ordering whenever they offer a free mystery gift. We drink a lot of coffee in my house and I can’t stand the taste of instant, so this is my one treat of the day.
Total: £92.93
Day 2
I transferred £105 to one of our daughters at university, her weekly allowance. I brought a packed lunch into the office made from ingredients I bought at Aldi.
I thought I’d gotten off lightly, but then the other daughter messages later in the evening and says her electricity bill has come in and could she have £90. I agreed, even though we pay her rent. Landlords have now worked out they can charge the students rent excluding utilities and make even more money from the parents.
I have a guilty secret – Gardenscapes, an online game where you build gardens. I started playing during Covid and promised myself I’d delete the app from my phone when it was “all over”. Well, that obviously didn’t happen. I spent £1.99 on a “Botanists package”, an in-app purchase, while half-watching television.
Total: £196.99
Day 3
I’m nearly out of my This Works CBD skin booster, so ordered some more using a 6.6pc cashback deal. I got another 10pc off by signing up to their mailing list. I always check to see if there are any promotions. In the end it cost me £34.20, with £2.32 in cashback.
This stuff really does work. A colleague at work said I look more like a 45-year-old than a 55-year-old.
We took the dog for a walk this afternoon and ended up in a pub – not an unusual occurrence for us. My husband paid for the lunch, and I paid £15 for a dog-friendly cab back home at around 3pm.
Total: £49.20
Day 4
A quiet morning followed by a wedding in the afternoon. I must admit, we currently go to more funerals than weddings at our age, so this was a bit of a treat. The cab home at 8pm was £38.
Total: £38
Day 5
We had planned to catch the train into town, but they were all cancelled so we ended up driving. The car park cost £3.50 for three hours. We had a fab Sunday lunch as a family. My husband paid for the meal. I then dropped him at a more local pub, drove home and walked with the dog back to the pub for a couple of glasses of wine.
The husband tends to pay most of the entertaining bills at the moment.
I caught the short train home for £3 at 6pm and watched the rugby on my own with the fire lit.
Total: £6.50
Day 6
I popped into the Co-op after breakfast for some bananas, but ended up spending £14.89 – this always happens. I spotted some reduced stewing steak and reduced chicken leg, before deciding ‘Oh, and I need some houmous, and a bouquet of flowers’.
I went to the post office, as I had to post two jackets that I’d sold on eBay. Postage cost £12.18.
Later in the day I dropped my husband off at the local hospital for some tests under sedation. While he was having some tubes poked into unspeakable places I went to the local Tesco and topped the car up on diesel for £75.50.
I also went into the shop. Bad mistake, I realise, £54.68 later. However, I did time it to miss the after-school rush. I bought a lovely joint of beef, steak, smoked fish and a large bag of washing capsules, which were on offer.
Total: £157.25
Day 7
A day in the office with the obligatory packed lunch. I was home late, so today was a miracle day and I didn’t spend a penny.
Total: £0
Overall total: £540.87
As told to Pieter Snepvangers.
The best of your comments from last week’s How I Spend My Money:
‘I’m 24, earn £28,000 and often jet off to glamorous locations. This is how I spend my money’
Elaine Cowan
You love your job and it gives you the chance to travel as you really enjoy doing. You get paid well enough to have a reasonable lifestyle. Maybe you will get a chance to work abroad again or join a better paid job you think you will enjoy with another company. Keep being optimistic. Being happy matters!
Melissa Bean
Wages are so rubbish in London. To pay more than 60% of your take home pay on rent for a room and utilities (no idea how you get to such high utilities in an apartment) is insane.
Judith Baker
You sound like a nice, decent level-headed person and you even wrote thank you letters after Christmas. While you are not, by any means, well-off at this stage you have a pretty enviable life. Please, please don’t give in to your father’s wishes that you ditch the job you have and chase the money too soon. You will live to regret that move. Trust me.
