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Pension is more than I earn

86 replies

Zaphodsotherhead · 26/10/2020 11:42

I've just Adulted and done my pension forecast (not eligible for another seven years, but thought I'd check).

I'm entitled to full state pension (phew, was a bit worried, hence checking). And my state pension is going to be more than I earn currently, most months.

The point of this post is really just me going 'wha'?', I mean, I know I'm not paid a great deal and I'm quite often pegged down to basic hours at present and I'm very grateful and all, but....

surely this shouldn't be possible? Add in the pittance I've currently got in private pensions and I'll be better off at 67 than I am at 60. Okay, if work up my hours I can earn more, but that's sporadic and unpredictable. My pension will come in monthly and I don't even have to do anything for it?

I dunno. It feels all kinds of wrong.

OP posts:
AnotherEmma · 26/10/2020 11:48

"My pension will come in monthly and I don't even have to do anything for it?"

Well, you do have do something for it; you have to pay National Insurance (or accrue NI credits by some other means) for 35 years. So you've earned it.

And the rate of the state pension is relatively high compared to other benefits for one simple reason: more older people vote than younger people.

You haven't said much about your current financial circumstances but if you're on a low wage there's a chance you might be entitled to universal credit, depending on various things.

Frownette · 26/10/2020 11:49

How much is state pension nowadays? I guess I could ask my mother later as she's done the requisite hours Grin

You've earnt it though, you've paid into this system all your life with NI contributions, VAT, income tax et cetera. You don't have to retire at 67 unless you want to.

It must seem a little odd though.

OnlyFoolsnMothers · 26/10/2020 11:49

Really? I recently checked mine on hmrc and it’s a pittance, worked 17yrs so far, 30 odd more to go and it’s crap. Relish it if you’re better off

Viviennemary · 26/10/2020 11:50

Are you self supporting on the amount you earn now?

Bargebill19 · 26/10/2020 11:51

As pp said you have earnt it. Enjoy it when you get it.!
Serious though, getting older gets expensive, so yes you may be very glad of it when you get it.

wintertime6 · 26/10/2020 11:54

Isn't the state pension around £500 a month. If you're currently earning less than that, then I guess you have very low outgoings and no rent/mortgage?

SengaMac · 26/10/2020 11:55

State pension is around £600 per 4 weeks.

KihoBebiluPute · 26/10/2020 11:55

Think of your pension as "deferred earnings" - you have earned that money across your working life having paid taxes and national insurance and private pension contributions which have been taken from your earnings as part of a deal that means you don't have to work once you get too frail to do so. It's not fun living on that small an income so well done for making ends meet at that level already.

Mumblechum0 · 26/10/2020 11:57

I've just looked it up, it's £758.33 per calendar month.

Guess I won't be retiring for a while yet....

oldmotherriley · 26/10/2020 12:01

You'll also get, Winter Fuel allowance (£200), free prescriptions, free bus/tram/rail/ travel (depending on where you live), Xmas bonus (£10); and if the State Pension is your only income you will likely qualify for Council Tax Benefit and Housing Benefit.

Bargebill19 · 26/10/2020 12:11

We’ve always said that we will have to work until we drop into our graves... even with private pensions to top it up.

oldmotherriley · 26/10/2020 12:17

To buy the equivalent of the State Pension as a personal pension you would have to amass a pension fund of £243,000 (men), £264,000 (women) - (and those are 2012 figures, they will be higher now). Of course, no State pensioner, has paid anything like that in National Insurance contributions. The State pension is a very good deal - and one that quite likely won't be available to many younger people, when they come to retire.

SlipperyLizard · 26/10/2020 12:31

Minimum wage for a 35 hour week is £287.35. State pension is currently £175.20 per week. So the pension is just under 61% of minimum wage.

Appreciate that your circumstances mean you’ll likely be better off, but the vast majority of people wouldn’t be.

Cheeseandwin5 · 26/10/2020 12:39

Look you have worked hard and deserve it.
I think maybe you have got used to getting by and maybe going without, but hopefully it will give you a chance to spoil yourself every now again.
I honestly think, once you start getting it, you may realise it doesn't go as far as you hoped.

Badbadbunny · 26/10/2020 12:44

It's quite common for people on low pay/part time jobs who've been accruing NIC "credits" towards state pension without actually paying much (if any) NIC due to the NIC threshold. When occupational pensions are added in (although small), it can mean that people have a higher income in retirement than they did when working.

Badbadbunny · 26/10/2020 12:48


Minimum wage for a 35 hour week is £287.35. State pension is currently £175.20 per week. So the pension is just under 61% of minimum wage.

Appreciate that your circumstances mean you’ll likely be better off, but the vast majority of people wouldn’t be.

Yes, but you get NIC "credits" towards a full state pension when you earn over £120 per week, so people who work part time on £120 per week can "earn" their £175 per week pension despite paying no NIC. The thing is that the state pension is no longer linked to earnings levels - it's now based on a cliff edge £120 per week. We used to have SERPS and then S2P which were earnings related so state pension would have been based on earnings levels - i.e. higher state pension for higher earners, but that was stopped some years ago in favour of a fixed rate for everyone based only on number of years of "credits" and not actual earnings.
Mindymomo · 26/10/2020 12:51

I presume the state pension will be more in 7 years. Don’t forget that for 100 of 1000’s of us women are missing out on several years state pension, as pension age has gone from 60 to 67 in my case.

SwedishEdith · 26/10/2020 12:58

What do you do, how many hours do you work and what do you earn per hour?

NMW is 8.72 per hour. 8.72 x 35 x 52 = 15870.4. That equates to 1322.5 per month.

So, if, you only work p/t, then, yes what you're expected to live in f/t when you're older may be more than not earning f/t now.

xoxogossipgirl2020 · 26/10/2020 13:02

Sorry to thread jump - I have a horrible feeling I won’t be entitled to a pension when I get to that age....I don’t really know where I get advise on it??? (Reason being that I haven’t always worked, and when I’ve been out of work, I haven’t signed on, so I assume I’ve not been paying into it???? Not sure)

MissScarletInTheSnug · 26/10/2020 13:08

You can login to your government tax account and check your state pension entitlement.

If you have been looking after children and claiming Child Benefit I believe that this will count towards it.

Viviennemary · 26/10/2020 13:09

You get accredited years if you've been at home looking after children and claimed child benefit. Not everyone will get the full amount.

BlackandGold · 26/10/2020 13:10

The pension forecast is assuming you aren't contracted out at work. If so your letter will have a COPE amount in it.
It can get complicated!

Zaphodsotherhead · 26/10/2020 13:46

It's currently standing at around £750 per month.

I currently earn around £600 a month. Self supporting, not eligible for any benefits whatsoever, but fortunate to own my own home outright (because of a legacy, I would never in a million years have earned enough for a mortgage). I get that I've paid in in NI contributions, but it's the fact that I can be allowed to struggle on on a pittance currently (I get dribs and drabs of earnings from my self employment too, but nothing notable, and this will continue after I retire).

OP posts:
acerred · 26/10/2020 13:52

I'm in the same boat, I checked my state pension forecast a few weeks ago and it's more than I earn Shock

Caelano · 26/10/2020 13:56

I’m confused. Surely even working in a NMW job is more than the state pension?
Unless you’re working very part time then I don’t see how your figures add up. Your living costs must be enviably low if you’re surviving on less than the state pension

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