Pension is more than I earn

[Zaphodsotherhead]

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.

I think it would be very difficult to survive on £600 a month even if you have no rent or mortgage to pay. Council tax alone usually will amount to at least around £100 a Month even with single persons discount.

Do you live alone? I've just stuck £600 pm into Entitledto (had to assume some figures) but that suggests you'd be entitled to council tax help and get some Universal Credit.

Yep, live alone and, because my income can vary so much (my contract is 16 hours per week. I've just done three months at 16 hours. Sometimes I work 32 hours one week, 16 hours the next four weeks, then another week of 28 hours...it depends.) One month my earnings may be £800, then several months of £550, another month of £700, then back down again...it's all so variable that claiming benefits is practically impossible and needs doing on a weekly basis. So I don't bother.

Council tax is £111 per month. I have survived in the past on far far less coming in. But my point is more about how can I possibly be paid more benefit wise (ie, pension), than I earn through actual work? NI contributions, I know, it's just...a shock!

As example of how times have changed --
A couple of friends of mine, married couple in their 40s, both do very similar jobs to her parents (think nursing/teaching) very similar level of training etc. They have two school aged kids and live in an ordinary house and go abroad to Europe on holiday about every other year.

Her parents live in a nicer house and in a much more expensive part of the country, my friends could never afford her parents house. Her parents also had two children, her mum stayed at home for ten years to look after them though, then worked part time, my friends couldn't afford to lose one income so she just had maternity leave off. As a child my friend also went on holiday abroad most years. My friends parents both retired in their 50s and their pensions add up to MORE than my friend and her husband earn now from working full time and one working 30 hours a week. They will never be able to retire in their 50s or have a lifestyle anything like her parents despite doing pretty much the same jobs.

Yes, my DB will get a civil service pension when he retires, and will be FAR better off than me! But then he didn't have years out from his career looking after children, or have to go back to work PT in order to care for them, thus losing his career and having to go back to work in the only sector available here, just to earn!

One pound in every six that the Government spends is spent on the State Pension.

I think it would be very difficult to survive on £600 a month even if you have no rent or mortgage to pay that’s why we all obsessed with property ownership in the U.K, either to downsize or equity release

My dm worked in a mw job most of her working life, earned on average £180 a week. Had full rent and council tax to oay, no other benefits. Her pension (she retired last month) is £175 a week and no rent or council tax to pay. She is absolutely delighted.

I assume that the no rent or council tax is incidental, Frouby? I will still have to pay council tax out of my pension.

And living on £600 a month is perfectly possible. You just cut your cloth according to your means. I assume those saying it's not possible are those who earn a LOT more. If you don't have mortgage or rent, then it's not that difficult, especially if you don't go out much.

Almost all my NI contributions came from child benefit or carer's allowance as I've been a sahm most of my life, and I'm due to get a full state pension as well. Also contributed a small amount into a private pension and got tax relief on that (despite not working so not paying any tax). Our situation is different though as DH has a good private pension and full state pension - our joint income will be much less than his current salary but my individual income will be higher than it is now (which is currently just carer's allowance and PIP).

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.

Yeah, enjoy it whilst it lasts. I reckon in seven years time if not before- they will get rid of all those benefits! I am 60 so this will all go by the time I not longer work. I guess I am a bit cynical!!!

Have you never spoken to a benefits adviser? If you own your own home, it is classed as a dwelling. You might be entitled to Employment Support or some kind of top up now.

My friend has just bought out her home with her partners pension as he is terminally ill and found this to be the case.

I think the way the pension system will change is to allow for more people to take it flexibly, carry on working part time while claiming a little, have diverse sources that make up a 'pension'.

Am not sure re council tax, the benefits calculator all state no council tax, she's filled in all the paperwork (was previously getting a bit of UC due to being furloughed) and just waiting for all the confirmations to come through.

She hasn't been as well off since she left my stepfather 25 years ago, despite pretty much working full time and raising 6 kids on her own.

@Zaphodsotherhead

Yes, my DB will get a civil service pension when he retires, and will be FAR better off than me! But then he didn't have years out from his career looking after children, or have to go back to work PT in order to care for them, thus losing his career and having to go back to work in the only sector available here, just to earn!

I don’t want to be an arsehole. But didn’t it occur to you that taking years out of the labour market and then working part time would affect you income and pension ?

It’s not a secret that people who work less earn less. I’m not sure what you expect the government ( Ie the general public ) to do about this. Why should other people pay to support your lifestyle choices to have kids and be a SAHP?

I assume that your children father, who benefitted financially from the choices you jointly made, will have a larger pension / life insurance which will help support you.

Not everyone can afford to retire in their late 60, many keep on working.

@Badbadbunny

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.

But if you were "contracted out" into a occupational pension, your state pension is reduced for each of those years.

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.

Are you crazy? Don’t you know what pensions are for? Do you think everyone should have to carry on working into old age?

I already have 38 years of ni contributions. It tells me I need another 4 to qualify for full pension which I can't claim for another 13 years. All of my years are earnings based as I only took 5 months off mat leave with my 2 babies.

Poster commenting about the pot required and how most people won't have paid that amount in, they won't, but then they wouldn't in a private pension either, the amounts paid in would have been invested and gained interest and value, sometimes for over 40 years.

That's why it's important to start a personal pension as young as you can as that's the money that's going to (hopefully) grow the most.

Lots of working people have less than £750 p/m once things like housing and commuting costs are deducted. It’s perfectly possible to live on if you don’t have huge outgoings. If you rent (an affordable property) housing benefit will cover it. Anyone with a mortgage would hopefully have it paid off by then (Although they may need money for repairs etc). You don’t pay full council tax either. Day to day I spend less than that now. I’m 50 so don’t see it all disappearing before I need it. That may change for younger generations.

Meruem of course many people do have to but it’s a miserable look out to see possibly 30yrs on such limited funds. God knows how much inflation will have affected bills but taking out my mortgage my bills/ things I will no longer pay for come retirement are prob c. 300, then food c. 150 a month for a single person- so 300quid left with endless hours in the day to fill. God help u if you want a holiday in your later yrs or to fix your car.

I'd love to know how it's possible to live any kind of reasonable life on £600 a month. To include all bills. Assuming you live in your own property.

@Viviennemary

I'd love to know how it's possible to live any kind of reasonable life on £600 a month. To include all bills. Assuming you live in your own property.

Without housing and commuting costs, with single persons council tax discount (or exemption), with lower overheads due to living alone, etc., it's perfectly "do-able". Obviously not a luxury life, but that's why people downsize their homes or do equity release, of have part time jobs in retirement.

My electricity bill is around £50/per month. My council tax is £111. Other bills are about £100 (house/car insurance, subscriptions, other bits and pieces). Food for me and dog around £40 per week.

I also have six monthly royalties from book sales, but these can vary so wildly that I don't take them into consideration (could be £200, could be £2000) and PLR which comes in in Feb and is around £1000. So there are additional earnings, but those tend to pay for extraordinary expenses. £600 is my regular and dependable income. It's perfectly possible to live on!

And no. No pension/income from the children's father. I'm not in the least surprised that I don't earn much @SOOLA, I made the deliberate decision to work locally (where the job market is very poor) and be time rich and money poor, as opposed to finding a much better paid job (I have a very good degree) in the nearest city and hour's drive away.

I am not complaining about being low paid. Not at all. See my above posts, I manage very nicely. It's more shock and surprise at my pension - the money I am considered to need once I retire (which I probably won't do completely) - is far more than the money I exist on presently. I won't claim benefits even if I did turn out to be entitled. I don't need them.

If you’re a writer, are you also aware of the ALCS schemes? They deal with secondary rights & journals/periodicals, but you have to apply if you qualify. It is worth checking.

www.alcs.co.uk/about-alcs