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 will be.
I'm nearly 30. I may be in position to start a small private pension mid to late 40s but I won't be counting on it and if I do it won't be much.

30 is really young in terms of your entire working life. How are you so sure can I ask?

There's lots of stories on here which highlight the importance of pension advice for women when they are younger! Too many people this financial advisers are there for the retired. They are for the young too to get a pension in place. Make sure you get credit for all your years at home , think carefully about the types of job you do take, if you do get divorced always take your pension share over a bigger share of the house equity. Be mindful of your own future needs.

They might have caring responsibilities preventing them from working.

This is all DParents have (with pension credit) - and they say they are better off than they ever have been! They used to have one income (manual work weekly pay)due to ill health, and only eligible for the old Family Allowance benefit. They now enjoy having regular payments! They do own their house though which helps - not something those who earn as little now as they used to will likely be able to do.

For people who rent do they get additional help? obviously this will increase as fewer people own their homes.

I’m by no means a fan of the government but this is why I think auto enrolment is such a good and important policy particularly for young people.

OP, it is always worth putting something in over nothing and as soon as possible. Compound interest over 16 years is not to be sniffed at. And don’t forget you get tax relief on your contributions.

They get housing benefit to pay the rent if they have no private pension.

You've got 16 years to retirement. That's time to make up some decent pension savings if you're earning better now

Housing benefit covers less than half of my Dad's rent. And he's in the smallest shoe box we could find him.

I qualified for a full state pension when I reached retirement age but at the old, much lower rate. I carried on working and deferred claiming it for 3 years which increased its value - I don't know if that's still possible though?

You'll just not have to fully retire, maybe go part time at 70 or something? I know plenty of people who havent retired by 70, many out of choice rather than money. By the time you get there lots of people will still be working at 70. Right now I'd prioritise paying into your pension, you still have around 20 years to pay in and build it up. As for uni your children will have to get jobs like most people did when I was at uni. My parents didn't give me money to live, I had to top up my loan by working.

There seems to be some confusion upthread about contributions.

You need 35 qualifying years to receive the full £185.15 per week state pension. This means either full rate NI contributions or credits from claiming some benefits, including Child Benefit. Even if you don't claim it because your partner earns too much, you should register for Child Benefit if you are not working full time and have a child under 12.

If you do not meet the contributions threshold you can top up in some circumstances, or will receive a lower pension.

OTOH, if you want to keep working past pension age, you can defer claiming your State Pension and get a higher rate when you do take it.

This is all according to today's arrangments. Who knows what the future holds? All the information here.

my DM lives OK on her pension about £870 a month she owns the house my DF recently died
it is enough for council tax, utilities, food fuel and maintenance on car, coffee out twice a week and lunch out maybe once a month and to buy presents and to pay a man to cut grass and the window cleaner and a UK holiday once a year and her knitting wool! but she says it is enough to live fine on on a week to week base, it won't stretch to cruises several foreign holidays
she has reasonable savings but she uses those to buy big stuff like a new car, boiler, better holidays etc or later if she needs it a stairlift it will also buy more care if she needs later on,
if you own your own home and make sure you do reasonable maintenance yo can live on full state pension but if you are still renting or have a mortgage it would be very very tough

Yes, it's not always enough to cover all the rent. Varies by area.

Pensions are my blind spot
I have an employers one (well, 2 as they changed the scheme) With aviva (says my money flexible retirement)
Wanted to add more but the min extra is £50pm which I couldn't do so I shove £10 in a pension bee one every month on the grounds that some is better than none

I can speak as someone who owns their own home. My husband is retired but doesn't get his state pension yet, whereas I qualified for mine a few years ago. We run a car, although I do use my bus pass quite a bit to get into the nearest City. We both have occupational pensions, but not large ones - but find we can manage ok. If you don't have an occupational pension but qualify for pension credit then I should think it's doable to live a reasonable life. I think it's important to have savings as back-up if you possibly can. Definitely your best bet is to put any amount, even if small, into an occupational pension.

I'm not expecting there to be a state pension in twenty years.

If my employer one doesn't cover costs (and I cannot afford to pay in any more), I'm screwed if I live that long - but if I don't, DP will get a reasonable-ish lump sum, I suppose.

I'll just keep concentrating on getting through the present day and deal with that if I make it that far.

As someone whose father paid into a work pension his whole life, then saw it raided under Thatcher (so he ended up with nothing) - I've never bothered with anything outside of savings plans and mandatory pension provision (NHS and recent others).

I intend to work my whole life anyway. As my 70 year old sister is already doing.

No-one can take away the money you get from your work. Anything else - if they can grab it, they will.

Boomer age people had the chance to make hay when the sun shone, for us the sun isn’t even remotely out

The sun didn’t come out for the entire generation. There were just as many boomers in badly paid jobs as there are in subsequent generations.

Not exactly. If houses and rent are much cheaper then it goes further doesn’t it? I wish the boomers would just admit their generation had it financially easy compared to almost every other.

Some boomers. By no means all.

I think these things have to be put into perspective.

State pension is about £9627.80 pa, you could expect to get circa an extra £2000pa in rate relief, pension credit etc. Bringing income up to £11,627.80 (circa £970.00 per month), with a part time job 16hrs on minimum wage = an extra £152pw = £7904.00
Total income = £19,531.80
After tax and NI = £18,139 (£1511.60pm)

If you found you were too unwell to work 16hrs, you could claim attendance allowance so income would be
State pension: £9627.80
Rate relief/pension credit: £5625.36
Attendance allowance (low): £3216.20
Totalling: £18,469.36
After tax and NI: £17,933.20 (£1494.43pm)

note above calculations using Turn2us benefits calculator and money saving expert tax calculator based on someone 66-74, who owns their own home. If you are renting or have a mortgage potential income could be more please do the calculations for your own particular circumstances.

A relative of mine on a really good civil service pension; had about £2000 a month, state pension payment on top of this minimal reduced due to the main pension, attendance allowance paid in the last five years of life. So all in all they had about £2,600 a month.

They went into a home and over a few years the costs blasted through the AA, civil service and state pensions entirely. A significant contribution was taken from their savings monthly to pay the bills (fees £3,500 - £4,000), and to allow them to have a hair cut, buy clothes etc . Almost all of the savings from having a good job/pension were wiped, and they got to the point of having to consider selling their house just to be able to survive.

By contrast another relative had only a small pension + state pension, again AA in the last few years of life, signed their home over to kids (maintaining right of residence) and kept savings well under £16k. Received entirely free care for a similar amount of time. Wasn’t strapped for cash every month and had enough to easily pay funeral.

So in short don’t panic. Yes person A was able to have extravagant holidays for 5-10yrs, but then they got too old to manage that and spent the rest of their retirement worrying about the state taking all of their money and losing the option to leave their house to relatives as they wished.

Also re. getting your kids through uni - depending on your income they will be entitled to loans etc. They are not automatically entitled to have you pay fees and their accommodation. Look into the finance and support for them available and introduce them to the idea of part time work and a summer job!

I think free prescriptions for over 60s are just about to go. Free TV licence went. Pension benefits are only going to go one way, and it's not up!

Deferring is still possible but they just give you what you missed in a lump sum which can have tax implications rather than topping up your pension amount.