Is living on the state pension really that bad?

We could live off the state pension, but that’s because our mortgage would be paid off by the time we reach it. There wouldn’t be much room for luxuries, though.

I’m in my late 20s, so I doubt the state pension will exist by the time I’m in my 60s/70s. I hope it will still exist by then, but we are planning without relying on it, just in case.

Both DP and I have pensions and I have a SIPP too.

But its not FREE its paid for by Council Tax and everyone else's income tax. Care Home costs are way higher than just a pension. Its the widows and widowers on State Pension with a very small private or work pension that are mostly struggling. I know quite a few in that category. Luckily for me my late husband saw it coming and managed to get some money put by for us, now me. I am OK but I still pay income tax but I dont begrudge the poor and disabled what they need. I know I am puting something back. As are any pensioner because they all pay VAT on things anyway.

The bottom line is about expectations and comparison with current lifestyle.

If you can live on what you've got now with luxuries and excess for savings every month, you will want a similar lifestyle on retirement. Probably not the savings element so much, but some is needed for emergencies just the same.

If you live frugally, have high outgoings, and just about manage, anything above that even by a few pounds on retirement is doable.

I'm retired BTW and am in the first category. Saving for pension was my no 1. priority when working. But not everyone can do that either. I know I'm one of the lucky ones. I don't know if I could live on the SP alone, but if I had to I probably could, but my lifestyle would be existence only rather than enjoyment.

I think if you own a house then repair and maintenance costs can be substantial. You need a decent savings buffer to fall back on for stuff like that, although one would hope that most people have at least some savings by the time they reach retirement. If nothing else, you should be able to save your mortgage payments once mortgage is cleared.

The answer will depend on the lifestyle you want in retirement. Even if you own your own home, you'll still have regular bills like:

• house - council tax, gas, electricity, water and food costs (which are easily £200 per week or more now and I can't imagine they'll be any cheaper in the future). Regular household maintenance costs.
• communication - mobile phone/landline, plus tv and streaming services
• transport costs - If you run a car, that's even more outgoings (MOT, petrol/electricity etc). If you don't have a car then you'll have public transport/taxi costs.
• Insurance - you'll still need home and contents insurance, you may be paying Life Assurance or other insurances like private medical insurance.

Then if you don't want to just live in your house and walk everywhere, you have to factor in some of the things that actually make life enjoyable, like eating out, meeting up with friends, buying a takeaway coffee, going on holiday (plus all the costs that go along with it, like travel insurance etc), entertainment like the cinema or clubs.

You'll also need an emergency fund for replacing things like washing machines, dryers, cookers etc., when they reach the end of their usable life. You may want to pay someone to do the cleaning.

That's actually quite a lot for £800 per month to cover. If you have no money, you have no money, you have to work with what you've got. So although it may be possible to live on the state pension, for me, it wouldn't be possible to live well and certainly wouldn't be possible to do the things I enjoy on that amount.

I think some people take a lot of comfort and self worth from assuming that their situation is entirely down to their own effort and doesn't rely on any sort of luck/chance.

Unfortunately that attitude means that they're unlikely to have sympathy for, or vote for policies that might make things easier for, those who have less.

My mum lives off state pension plus a little extra. We pay her to clean our house and so does my brother, she also does a few hours a week in a gift shop which she loves. She is the type who needs something to do otherwise she’s a menace to society, if she wanted to she could probs live off state pension. She doesn’t have many outgoings.

She doesn’t go on holidays unless I take her, but I take her because we have shared interests. She traveled when she was young so she feels she’s “seen everything that’s good”. She does live a pretty “humble” life I guess but she’s happy and her focus now is spending time with her grandkids and gardening.

My dad on the other hand could not live off state pension. He grafted when he was younger and didn’t go abroad till he was 56, so now he’s making up for lost time (as he should). His main focus is having as much fun as humanly possible as quickly as possible. I think it just depends on your outgoings and the type of life you want. My mum did all her fun stuff when she was young and my dad is doing all his fun stuff now he’s old. I think I’ll fall somewhere in the middle.

If all you have is full state pension, you won't get pension credit so no freebies as a result of qualifying for that, but you will get housing benefit if you rent. The problem with private rented is that the maximum amount of housing benefit very rarely covers all the rent. So the remainder of the rent you'd have to top up out of your state pension.

Realistically the only places covered fully by housing benefit in private rented is either shared accommodation, so eg a room in a HMO, or somewhere with damp/mould issues.

Anywhere self-contained (eg a studio or one bed flat) and (hopefully) free from damp issues will be more than the maximum housing benefit rate.

This is categorically incorrect. The last figures I was aware of are that 80% of people die still living in their own homes. Most of those will not need paid for care. That may now be a little out of date but judging by the friends and family around me who are beginning to die off, it's still largely true.

You've made an informed decision which is great. It would be great for other people if they did that too. They might make a different decision even under the same circumstances but they'd be making an active choice. Also, it’s important to reassess if things change.

@Pddn

not everyone has the capacity to study post level 2 (or even level 2, gcse) whilst it can seem everyone is able in your own circle, if like me you work with the general public you quickly realise that there are many people who struggle academically speaking, lack understanding of things I take for granted. 100 iq is average intellect, most the people attending my programme are at a guess in the 80’s, so able to function as independent adults but have only ever coped with entry level jobs, not capable of being a supervisor or handling much paperwork. These are lovely people but are never going to earn well as they do not have a capacity for either better paid desk work or trades that require you to be self driven (most trades are contractors/self employed and require qualifications these days, hard for many). One chap I know was a building site labourer until his body said no more

And sometimes those supervisor roles are only another 50p an hour.

Its frightening really that there are people like @Pddn with their university degrees in STEM subjects enabling them to gain high paying employment but have such little understanding how so many people live and how the rest of society functions.

I've done my calculations recently and I definitely couldn't live on it as a single person.

They haven’t paid enough to cover them for luxuries by working all their lives. Many people in low waged jobs take out more then they put in by their children going to school which has to be paid for, free school meals, child benefit, medical costs, general contribution to roads, police services and other infrastructure costs.

State pensions are the biggest cost to the country’s welfare budget. People are living much longer than was anticipated when pensions were introduced. People don’t want to pay taxes because they’d rather spend it on themselves now, which means there is less in the pot for pensions etc.

People have to stop thinking that ‘working all their lives’ guarantees a luxury retirement for thirty or forty years. All countries are having to reduce pension provisions because they are unaffordable. You have to have provisions for that over and above the state pension which can only be a safety net. You have to have private pensions, part time jobs or savings to supplement it. It is not a surprise - the pension amounts are all available and don’t change much over time.

DH and I will both have full state pensions and he has a small private pension. When I get my state pension a few months after him we will be better off than we are now living solely on his wage.

No, pension credit tops it up to what full state pension would be. It's not more than the state pension.

Day to day it sounds reasonable, but then you have to factor in:

• bills
• owning/running a car?
• pets?
• home decoration and repairs
• replacing appliances, inc. high value things the boiler
• clothes and shoes
• birthdays and Christmas
• social life - meals out, taxis, tickets, drinks
• holidays

Maybe you can manage day to day if you do not drive. What if you need a new roof, a new hip and don’t want to wait 2-3 years, a holiday. My DM manages on a state pension but has no housing costs as she lives in a council owned property and has a low cost hobby.

If you own your house outright, low council tax band, one car outright and low insurance and are not wanting to travel much then you can live, I know several people who live on just the state pension and have good lives but they do have to save up for things and don’t go on holidays unless their family pays.

Depends which pension you get, my parents only entitled to the old state pension which is below the new state pension yet they are still expected to pay full council tax, water, electric, gas, etc..then obviously food costs, transport costs to various hosp and docs appointments it all adds up and thats without any emergencies that may crop up

I mean, you could live on it, but frugally.

I take home £640 per week (I am paid weekly).
Rent (SH) and CT, which I pay in full is £270. I put away £100 a week for holidays. I won’t have those costs in retirement, already explained in my much longer previous post! So 370 + 240 current state pension rate = £610.

So I am basically only £30 a week better off day to day, than I would be if I was retired. It’s not a lot. I could cut £30 from my spending now if I had to without suffering. I eat well, wfh and don’t skimp on the heating. I don’t feel “poor” in any way. I know people with far less.

I had no pension then my work place opted me in (5 yrs ago) and I opted straight out! The payments they were going to take was a big chunk of my holiday budget! So I don’t take any holidays for 15 years in the hopes I can take some post 67? That makes no sense. The pot would have been tiny and probably would go on council tax anyway! Because with a private pension I’d get no reduction.

I’m not “unusual” in any way, sure MN is skewed to high earning home owners but there are plenty out there in my circumstances, plenty worse off than me too.

I know, or knew, a fair few exceptions. I don’t think it is as uncommon as people assume.

@Pddn If everyone got a STEM degree like you then you'd need a STEM degree to get a minimum wage job.

If everyone was a millionaire then a million pounds would buy you a cheap package holiday for a week.

You directly benefit from the scarcity of your abilities - they make it possible for you to end up further up the heap.

Luckily for you, a basic inability to understand how life works for the majority doesn't attract a financial penalty (Hint: for you to do well, others must do poorly - your situation is built on the backs of those less fortunate as well as your own hard work).

Feel lucky rather than patting yourself on the back. It's healthier for both you and society.

Yes, the predictability is a big thing. People often say that it's harder for pensioners than working because they're on a fixed income. But that perspective depends on your experience of working life. If you had a career with progression then the idea you can't do anything to get more money seems hard. If - like many people - your working life was low-paid, unpredictable and insecure work then a fixed income seems a good thing.