Renting into retirement - WIBU to spend my pension pot before age 67?

She going to run it down anyway isn’t she. Her savings would last me 4.5 years in rent and council tax. Let alone anything else I needed. Someone with a mortgage won’t (on the whole) have that ongoing financial cost in retirement. And someone with no savings, will have help to pay it. So she’s trapped in the middle

Bullshit. I'm not privileged but I would never do this, it's so unethical. I am a huge believer in the welfare state as a safety net, and have used it to claim job seekers when I lost my job 10 years ago. But I would never seek to engineer ways to get my hands on government money, especially not to fund my winter sun holidays, knowing it could be better used to support a disabled person or a looked after child or the NHS.

What a terrible system.

OP, I think there are real risks with what you’re proposing- it relies on a) no change to the benefit rules and b) you not getting investigated for deprivation of assets. If you were to be investigated there’s a really good chance they would consider you to have deprived yourself (which is exactly what you are planning to do, to be fair).

A much safer approach would be just to draw down on your pension to pay your rent and council tax etc in early retirement and fund a decent (but not extravagant) lifestyle. After a few years the money will be gone, at which point you’ll be legitimately entitled to support. I know you find it annoying to have saved the money for it to go on things like rent and tax, but that’s completely normal- everyone has to pay for this stuff.

She is an ordinary working class person?

It’s not her making you feel like a mug, it’s the system. You’d be free to do the same, you’re choosing not to, which is absolutely your right. But it’s not like she’s the one making the rules.

Yep. And yet she'd rather run down a real asset because - what? She thinks she worked harder than other people and it's not fair? Or she sees the chance to be a bit grabby and have it twice? It's all so juvenile.

By that token anyone who has spent money on anything “frivolous” in their working life should be lambasted. They’d all have more for rent, council tax, wouldn’t need a state pension, would have more to pay for their care home/carers in later life.

I don’t think it’s confusing. It’s clearly a pension - she said her employer has contributed.

She’s using life savings in terms of “this is the sum of all the money I’ve saved in my life - there’s nothing else”

Hate the game, not the player. I dont know what the answer is but clearly the system isn't working if people can do this.

Having said that I dont blame OP or begrudge her some winter sun.

Yes you enjoy your holidays - the rest of us will cover your rent and council tax for you….

Three years of winter sun ie a little apartment in the Canaries Jan-March plus spends = £8k x 3

I would check your lease agreement, most HA have a clause that your tenancy can’t be vacant for more than 28 days.

Your post is very black and white between two options, but surely there are other choices which would also improve your quality of life after 67 a lot.

For example, if you took your annuity from 65 or 67 instead of 60, it would be higher. And if you continued doing some work between 60 and 67 it would be higher still as you would continue contributing.

Why not do some work, pay your rent from income and gradually buy the car and white goods over the next couple of years. Working wouldn’t need to stop you having 3 months away in winter if that’s your dream and you choose the job carefully.

If you’re renting are you somewhere reasonably small? Or will you need to move?

You’re correct. It’s a thing - as it should be.

So you will give money to your kids, do that those of us who work hard can subsidise your pension? This is why our Welfare bill is crippling us. Have some pride, keep working and try and increase your bank account.

This!!!

This is where I am happy to pay tax - genuine safety net for instances like this

I can’t wait to pay tax when I retire to fund the likes of you - you have a pension that you could use to fund retirement initially until it runs out, but instead you are going to blow so you can be paid for by taxpayers. I think this is morally wrong.

You mean act like it’s the (19) 30s and have them all taken out? 😂
Don’t think the nhs will do that anymore x

Op I think generally that benefits should be cut but what you are proposing is ok in my view given that presumably the alternative is you need to keep working to state retirement age. This is what you have saved for.

oh and get dentures, save any dental bills.

I have read this thread with interest as I am in a similar postion, however I have no idea about the way forward.

I am 57 and in a housing association property.
Because of having had an accident 6 years ago which left me with a brain injury, that now means I am disabled, I claim ESA, UC and PIP. This gives me a comfortable standard living.

Two years ago I was medically retired and as such do not need to look for work.

I have a pension pot of approx £180,000 which is managed by a financial advisor, who has advised me to not touch a penny of the pot until I absolutely have to, as all my benefits (except PIP) will stop.

This advice was confirmed by DWP.

Had I not had this advice, I would have presumed that it was my responsibility to provide for me, not the tax payers (although I was a tax payer for 31 years)

So, it stays in a pension pot, until.....who knows?

i think buying a car, white goods, perhaps carpet? would be a good use of your money, also a funeral plan.
then see how much you have versus whether you get help.
as you need to pay rent as your spend your money your benefit will surely increase?

I am so sorry if this has been asked and answered but…..
Your pot from, what, an employee pension? Is £86k?
I would be very surprised if you could get an annuity of £6k on £86k, that would be a really, really great rate.
Alternatively, you don’t buy an annuity. You can put your pot into drawdown. You take as much or as little as you want each year. 25% of everything you take in a year is tax free, (you have to have NOT taken a tax free lump sum at the beginning) the rest you pay tax on depending on what else you’re earning.
If you take the whole lump sum in one go you will be hammered by tax.
Should you stop working you can take £16760 a year without paying tax.
The thing is, none of us know what you live on now?
Would that be enough?

Further up the rightmove list there are slightly more expensive flats that are lower maintenance charges (less than 1k / yr) and one freehold, so I’d have a good look around into those first op.

It’s a basket case of a country because people can’t afford to buy housing on the wages offered. If that box hadn’t been unticked 30 years ago by buy to letters this problem wouldn’t be occurring. Or if they sorted out service charges.

I just checked and you can get a nice retirement flat in my town for 60k, but annual service charges are potentially 9k. Bloody hell. That’s nearly half minimum wage.

The government was warned this would happen. Personally I’d rather support other people who’ve worked into retirement than the bloody whole-life benefit crowd.

My dad had similar amount. He retired earlier than he wanted: 62. He moved his pension and it was a ln investment one which earned him more . It has lasted him so far till 75. There is still some left and he brought a car with it. Back when cars were cheaper.

He does receive some disability benefit for a work related health issue and he lives in a sheltered flat. So he does get some housing benefit. However he pays council tax and he pays tax on that pension! He wouldn’t have dreamed of what you are doing even though he would get more benefits. I understand where op is coming from but it’s not really right is it.