Is anyone going to be living just on state pension when they retire?

[Shinyseas]

It looks like I will be. Never really earned enough to put money aside for a pension, married someone who was terrible with money and at the age of 51, have youngish DC so even though I’m earning better money now, I’ve got to get them through teenage years, then off to Uni. All feels too late to save anything decent. I’ll be early 60s before my youngest leaves home.

When I checked this week, my private pension is set to give me 1.5k a year 🙁

People do survive on the state pension I know - but it must be very very tight.

I should have clarified for you, that I haven't worked a corporate job for the entirety of my life, only at the point (aged 40) where it became evident to me I needed to make a choice between enjoying what I do and being altruistic v's providing for myself. I've worked in hospitality, child care, teaching, factory work, a whole variety of jobs previously. I've worked in jobs that benefit others, and I very much hope I will go onto again once I'm out of Corporate in the next 3 years (if I can sustain it that long).

I've made my life choices so that I can provide for myself and provide for others.

I've made my life choices so that I can provide for myself and provide for others.

A lot of people don’t have those life choices. Just having them makes you very privileged.

I have a question if you have time?

This pension credit thing, so everyone on low pension gets topped up? Why don't they just up it then? What's the point in the pension credit? Why not just adjust the pension amount you get automatically?

Wow, so do you actually enjoy your life at all?

Is it going to be worth it when you're 70 to finally leave work having all those years doing something you hate?

because some people have savings which would affect that

I don't get this because it's not really income, it's savings, you've paid into a pot (NI) and now you're drawing that out as promised. It was taxed when you worked and earned hence paying the NI in the first place.

This is double dipping as far as I can see but I admittedly know very little about pensions.

@freemillivanilli pension contributions are not taxed. You get the tax relief automatically if your employer takes workplace pension contributions out of your pay before deducting Income Tax.

I know, I'm asking the people saying they should be taxed.

I don't get this because it's not really income, it's savings, you've paid into a pot (NI) and now you're drawing that out as promised. It was taxed when you worked and earned hence paying the NI in the first place.

Pension contributions aren't taxed to start with though. They come out of your pre-tax income, before tax is calculated.

You've missed the point though. You're claiming that pension contributions are taxed when you first receive them, like money for savings would be.

But they're not.

I know, I'm asking the people saying they should be taxed

The money is tax free on the way in and it’s taxed when you take it out. It’s not difficult to understand.

I think the Guardian ran an article some years ago 2017? , stating that something like 1 in 3 pensioners would be in this position .The media makes out all pensioners are well off ,this is far from true sadly. My friend was unable to pay into a pension as a Mum with 3 children ,and a self employed DH there was no money to spare. OG should be reduced though ,and all pensioners are currently able to claim Heating allowance ,free bus travel and TV licence.

all pensioners are currently able to claim Heating allowance ,free bus travel and TV licence

You don’t have to claim the £200 winter fuel allowance, it’s paid automatically. Free TV licences are long gone and for free bus travel you need a bus service - there aren’t any where we live. Free public transport is a huge bonus if you live in London.

Like OP, I never earned enough to pay into a private pension, and now I'm 63, will get a government pension in 3 years' time. Luckily, the mortgage was paid off some years ago, the "kids" are 40 and 38 now.

One issue is low wages in traditionally female type caring roles.

People working full-time regardless of sector should not be on the bread line. As a society we absolutely need people in caring roles.

They should be able to have a life and put a bit aside for pensions.

They are if you are paying into a private pension. The payments come from your wages which are taxed. More and more pele are being encouraged to take up private pensions, so yes, these are taxed twice - if you end up eating enough pension income to be taxed when receiving them.

The payments come from your wages which are taxed

They’re deducted BEFORE tax. The money isn’t taxed twice.

If you pay into a private pension then the basic rate tax is reclaimed by the pension provider and added to your pension pot. It is explained here www.gov.uk/tax-on-your-private-pension/pension-tax-relief

If you are a 40% (or above) tax payer then you have to fill in a tax return to get the extra.

@Mia85 and then along come the chancellor of the exchequer and does a tax grab on private pensions - and takes all back and some extra on top! Then you still get to pay tax when claiming it back if you are ‘lucky’ enough to earn enough pension.
you are still getting taxed multiple times. They give with one and take with another. Plus people need to be reminded that once that money has gone into a pension fund - it’s gone. You can’t take it back out early, unlike an isa, if you suddenly fall on hard times and need the money to meet your rent/mortgage/food etc. it’s touted as a savings plan, when in fact it’s more like an insurance scheme.

With ak private pension tax deductions come from the payments in . if I were to pay in £500 pcm I would get tax relief of £100, so the pension company take £400 in payment but credit £500 to my pension.

You are not getting taxed multiple times. Of course the rules on pensions might change but making up a scenario in which there is a 'tax grab' does not prove your point. You only get taxed on the way out and 25% of that is tax free anyway.

Nor is it like an insurance scheme. Yes you can't take it early but it is not insurance. If it is a defined contribution scheme and you die before you spend it you can leave it in your will, it doesn't die with it.

Then maybe you would like to ask the chancellor for my £15k tax raid back from the 1990s? And yes you do get taxed.
the defined contribution scheme is worthless to someone need img that money to survive now. Not much good when you are dead. Yes, it might help someone else - but only if you have someone to leave it too. Personally, I don’t. So if I die before I can claim the grand total of £600 - £1k per year it will pay out, then only the pension fund benefits. I can’t and will never see the thousands I’ve paid into it over the years. Total waste. it is an insurance policy against getting old and unable to work no more and no less.
Thankfully I stopped paying and saved the money instead. Now mortgage free on a property which could earn myself an income, if I need it. - a property which will be sold and go to charity on my
death, if it’s not gone on care home fees.

alphabet1 it might be worth getting some advice on the pension you have. If is it a defined contribution scheme, you can start taking money from it at 55 and you are not limited to how much of it you can take each year. It is your pot of money that you draw down as you wish. With the first 25% tax free.

I think alphabet1 must have a defined benefit scheme, the health of which suffered from Gordon Brown's infamous abolition of tax relief on dividends paid into pension schmes.

@Mia85 spot on. And it’s never ever recovered. Whilst the money saved has paid off mortgages and been saved for more than one ‘pissing it down’ day, in the intervening years.
@Chewbecca I’ve taken advice from several different independent financial advisors. All have said to throw more money into the mythical retirement pot. Had I followed any of the advice I would NOT be mortgage free in retirement with a healthy savings pot to eek out my state pension, much more likely to be in rented accommodation now. Nor would the money have been in my savings when I desperately needed it. At least one wanted to invest my entire savings in a pension. The only thing I’ve learned in life is that state will never help you when you are vulnerable - so don’t let yourself be, if you can possibly avoid it. For me, starting a private pension was a waste, stopping it, and saving myself, was the absolute best thing I could have done for me.