THE average 20-year-old in Northern Ireland will spend £1,783,553 in today’s money over his or her lifetime, a new report says.
Of this, about £186,000 will go on food and non-alcoholic drinks, more than £550,000 on your property and utilities, £200,000-plus on transport, the thick end of £40,000 on booze and fags, and around £150,000 on holidays.
Another £76,000 will go on clothing (and shoes), £114,000 on eating out and more than £50,000 on phone and internet.
Nearly a million pounds (£939,870) will shelled out in Northern Ireland by the 'mid-life' age of 50, but the remaining £843,683 will be spent in later life including £397,012 in retirement (over-65), the report says.
The figures are contained in a ‘Cost of Tomorrow’ from financial planning and investment management group Tilney using minutely-detailed analysis of Office of National Statistics (ONS) data.
The report details precisely what households (split by income) spend their money on at different life stages, and reveals a worrying disparity between people’s retirement aspirations and their retirement reality.
In the UK as a whole, for example, households spend £48,000 on alcohol in a lifetime (£12,000 of this in retirement), £7,381 on milk (£2,163 in retirement) or £75,000 on utilities (a third of this after 65).
The report says that pre-retirees, aged 45 to 65, are underestimating retirement spending by £100,000, exposing the pressure their savings and investments may come under in later life.
Andy Cowan, head of financial planning at Tilney said: “The sums we spend over our lifetimes when quantified in today’s prices seem mind-bogglingly large, and yet they reflect the reality of life today.
"The top quarter of households splash nearly £3m in total, much of which is when they are no longer working and can really enjoy the fruits of their labours.
"But while some of today’s retirees are in a position to enjoy recreation and achieve their desired lifestyle, those coming behind face significant pressures on retirement income and much greater uncertainty because of the demise of traditional, predictable final salary pensions, and must overcome a number of hurdles if they want to ensure they can live with financial security in their own retirement."
He added: “The key to enjoying a comfortable or even prosperous lifestyle in later life when you are no longer earning is, of course, to plan ahead and to start investing as early as possible.
"People set expectations for their living standards in retirement during their peak earning years in their 50s, and this is the time when most ramp up saving, but it is also important to invest it in the right places and minimise the burden of tax. Taking advice on how to do this effectively is vital to ensure our aspirations can be realised.”
The vast majority of over 45-year-olds believe they will either improve (36 per cent) or maintain (48 per cent) living standards in retirement, but Tilney’s evidence shows they are underestimating their retirement budget by almost £100,000.
They expect to spend £16,456 per year, a total of £325,800, but will actually spend £420,500, which the report says indicates that that people may not be putting enough aside for their later years.
